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Govt increases sugarcane FRP to Rs 290 per quintal, says it is ‘highest ever’

Announcing the new FRP, Union minister Piyush Goyal said the decision will benefit 5 crore sugarcane farmers across the country.

Written by Krishn Kaushik | New Delhi |
Updated: August 26, 2021 2:30:52 am
Centre hikes sugar FRP to Rs 290/quintalFarmers in Punjab had launched an agitation last month and blocked a national highway and rail tracks in Jalandhar to demand an increase in sugarcane prices, while claiming that their production cost had spiralled considerably. (File)

Months before Assembly polls in Uttar Pradesh and Punjab, both states with regions where sugarcane is the primary crop, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday announced the “highest ever” Fair and Remunerative Price (FRP) of sugarcane payable by sugar mills for 2021-22 sugar season — at Rs 290 per quintal.

Announcing the new FRP, Union minister Piyush Goyal said the decision will benefit 5 crore sugarcane farmers across the country.

Last year, the FRP was set at Rs 285 per quintal, which was a jump of Rs 10 per quintal from Rs 275 per quintal decided for 2019-20. The sugar season is from October to September every year, and the government announces FRP in advance, which is the minimum price that sugar mills have to pay the farmers.

In a statement, the government said that its “proactive approach to protect interest of farmers is also seen in the decision of no deduction in case of sugar mills where recovery is below 9.5%”. Such farmers, it said, “will get Rs 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of Rs 270.75/qtl in current sugar season 2020-21”.

The FRP is linked to the basic recovery rate of sugar, and those with a recovery rate higher than 10 per cent get a higher FRP.

Goyal said that when the “recovery increases beyond 10 per cent, then on every point 1 per cent rise, additional Rs 2.90 is paid per quintal. Even if a farmer has less than 9.5 per cent recovery, their FRP will be Rs 275 per quintal”.

The statement mentioned that the cost of production of sugarcane for 2021-22 sugar season is Rs 155 per quintal, and the new FRP at a recovery rate of 10 per cent is “higher by 87.1% over production cost, thereby giving the farmers a return of much more than 50% over their cost”.

Highlighting the numbers for the last two years, the government mentioned that in the ongoing season, “about 2,976 lakh tons of sugarcane worth Rs 91,000 (crore) was purchased by sugar mills, which is at all-time high level & is the second highest next to the procurement of paddy crop at Minimum Support Price”.

In the run-up to the Assembly elections early next year, Opposition leaders have been attacking the BJP government of Yogi Adityanath in UP, which has not increased its State Advised Price (SAP) for sugarcane for three years, and it stands at Rs 315 per quintal.

Earlier on Wednesday Congress leader Priyanka Gandhi Vadra tweeted that the “Congress government in Punjab had listened to the farmers and increased the price of sugarcane to Rs 360 per quintal”. Although thje BJP had promised a Rs 400 per quintal price for it, it has not increased SAP in three years, she added.

RLD leader Jayant Chaudhary, who comes from the sugarcane belt of western UP, had also tweeted on Tuesday, posting “Yogi ji wake up”, as Punjab had increased the price.

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