The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to increase the fair and remunerative price (FRP) for sugarcane by Rs 10 per quintal to Rs 220 per quintal for 2014-15 marketing year. The FRP, which is the minimum price that mills need to pay to cane farmers, stood at Rs 210 per quintal in the ongoing 2013-14 marketing year (October-September).
The proposal moved by the Food Ministry was in line with recommendations of statutory body, the Commission for Agricultural Costs and Prices (CACP), which advises the government on pricing policy for major farm produce.
The FRP is the minimum price that sugarcane farmers are legally guaranteed. The FRP 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 statutory advised price (SAP) and millers can offer any price above the FRP.
India is the world’s second largest producer of sugar after Brazil. However, the country is the biggest consumer of the sweetener. The annual domestic demand of the sugar is estimated at 23 million tonnes. The government has pegged sugar output at 24.1 million tonnes for the 2013-14, lower than 25 million tonnes achieved in the previous year.