Govt approves FRP of Rs 290/qtl for sugarcane farmers

New Delhi, Aug 25 (IANS) Keeping in view the interest of the sugarcane farmers, the Cabinet Committee on Economic Affairs on Wednesday approved Fair and Remunerative Price (FRP) for sugarcane at Rs 290 per quintal, based on 10 per cent recovery, for the sugar season 2021-22 (October-September).

With the Rs 290 per quintal rate, the CCEA, chaired by Prime Minister Narendra Modi, will provide a premium of Rs 2.90 per quintal for each 0.1 per cent increase in recovery over and above 10 per cent, and reduction in FRP by Rs 2.90 per quintal for every 0.1 per cent decrease in recovery, a Cabinet release said.

"The government's proactive approach to protect the interest of the farmers is also seen in the decision of no deduction in case of sugar mills where recovery is below 9.5 per cent. Such farmers will get Rs 275.50 per quintal for sugarcane in the ensuing sugar season 2021-22 in place of Rs 270.75 per quintal in the current sugar season of 2020-21," the release said.

The cost of production of sugarcane for the sugar season 2021-22 is Rs 155 per quintal. This FRP of Rs 290 per quintal at a recovery rate of 10 per cent is higher by 87.1 per cent over the production cost, thereby giving the farmers a return of much more than 50 per cent over their cost.

In the current sugar season of 2020-21, about 2,976 lakh tonnes of sugarcane worth Rs 91,000 crore have been purchased by the sugar mills, which is an all-time high level for the crop and is the second highest next to the procurement of paddy at MSP, the release said.

Keeping in mind the expected increase in the production of sugarcane in the ensuing sugar season of 2021-22, about 3,088 lakh tonnes of sugarcane are likely to be purchased by the sugar mills. The total remittance to the sugarcane farmers will be about Rs 1,00,000 crore.

The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultations with the state governments and other stake-holders.

In the last three sugar seasons -- 2017-18, 2018-19 and 2019-20 -- about 6.2 lakh metric tonnes (LMT), 38 LMT and 59.60 LMT of sugar were exported, respectively.

In the current sugar season 2020-21, against an export target of 60 LMT, contracts of about 70 LMT have been signed and more than 55 LMT have been physically exported from the country, as on August 23, the release said.