For 2015-16 season (October-September period), the Cabinet Committee on Economic Affairs (CCEA) has approved a Rs 10 per quintal increase in the Fair and Remunerative Price (FRP) for sugarcane to Rs 230. The government has fixed sugarcane price at Rs 220 per quintal for the current 2014-15 season.
The FRP will be linked to a basic recovery rate of 9.5%, subject to a premium of Rs 2.42 per quintal for every 0.1% point increase in recovery above that level. The CCEA has approved to the recommendation of the Commission for Agricultural Costs and Prices (CACP), a statutory body that advises the government on the pricing policy for major farm produce.
The FRP is the minimum price that sugarcane farmers are legally guaranteed. It is fixed after taking into consideration the margins for sugarcane farmers, based on the cost of production of sugarcane, including the cost of transportation. The state governments are however free to fix their own State Advised Price (SAP) and millers can offer any price above the FRP.