The Tamil Nadu government has set the State-Advised Price (SAP) for the current season (October - September) of sugarcane at Rs 2,850 a tonne. The fixed SAP is Rs 550 more than the centre-advised Fair and Remunerative Price (FRP) of Rs 2,300 a tonne for the sugar year 2015-16.
Though this hike could evoke cheer among cane farmers, two years of cane arrears running into hundreds of crore in the state can prove to be a dampener. The sugar mills had sought state government support for over Rs 300 crore in arrears to farmers by end of 2013-14 sugar year.
The mills are struggling to pay the FRP, at current sugar prices, which is why the centre has given Rs 45 a tonne cane subsidy.