The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season. The increase is also likely to result in states like Uttar Pradesh, which do not follow the centrally-announced FRP, raising their own advisory prices.
The decision would benefit jute farmers mainly in West Bengal, Assam and Bihar which account for 95 per cent of the country's jute production. The government in the Budget for 2018-19 had announced fixing MSPs at 1.5 times the cost of production for various crops.
PM Modi said a major decision was taken in this year’s budget to ensure adequate returns to farmers when the government decided to give at least one-and-a-half times the input costs as MSP for the scheduled crops.
The M S Swaminathan committee’s widely disseminated recommendation, to fix MSP at levels “at least 50 per cent more than the weighted average cost of production”, remains a holy grail or partial reality at best.