Centre hikes sugar FRP to Rs.290 per quintal; 87% above cost of production

The Cabinet has approved an increase in the fair and remunerative price (FRP) of sugarcane by Rs 5 to Rs 290 per quintal for the upcoming sugar season, said Piyush Goyal, Union minister for commerce, industry, food & public Distribution in a cabinet briefing.

The cost of production of sugarcane for the sugar season 2021-22 is Rs 155 per quintal. The FRP of Rs 290 per quintal at a recovery rate of 10 per cent is higher b is higher by 87 per cent over production cost, he said, adding that sugar cane farming is more remunerative than other crops.

The decision will benefit around 5 crore sugarcane farmers and their dependents, as well as about 5 lakh workers employed in sugar mills and related ancillary activities.

The decision to increase the FRP of sugarcane for the 2021-22 marketing year (October-September) was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA). This is the highest ever FRP approved for sugarcane farmers, according to the government.

The government had fixed sugarcane FRP at Rs 285 per quintal for the current 2020-21 marketing year. However, in case of recoveries falling below 9.5 percent, the price paid to farmers will be fixed at Rs 275 per quintal.

In the current sugar season 2020-21, close to 2,976 lakh tonnes of sugarcane worth Rs 91,000 crore was purchased by sugar mills, Goyal said, adding that this will likely go up to 3,088 lakh tonnes in the sugarcane season starting October 2021, while the total remittance to the sugarcane farmers will increase to about Rs 1 lakh crore.

The FRP approved shall be applicable for the purchase of sugarcane from the farmers in the sugar season 2021-22 (starting w.e.f. October 1, 2021) by sugar mills. Out of the Rs 75,845 crores cane dues payable to farmers for the 2019-20 sugarcane season, Rs 75,703 crore has already been paid and only Rs 142 crore arrears are pending. For the current sugar season 2020-21, out of cane dues of Rs 90,959 crores, Rs 86,238 crores have already been paid to the farmers.

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