Source: TOI
Context: The Cabinet Committee on Economic Affairs has approved a Fair and Remunerative Price (FRP) of ₹355 per quintal for sugarcane for the 2025–26 sugar season.
About Fair and Remunerative Price (FRP):
- What is FRP?
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- FRP is the minimum price sugar mills must legally pay to sugarcane farmers.
- It ensures fair compensation and is a statutory mechanism under central government policy.
- Established in: Introduced in 2009, replacing the older Statutory Minimum Price (SMP)
- Legal basis: Governed under the Essential Commodities Act, 1955, ensuring price parity and farmer protection.
- FRP fixed by:
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- Recommended by the Commission for Agricultural Costs and Prices (CACP).
- Final decision rests with the Cabinet Committee on Economic Affairs (CCEA).
- Objectives of FRP:
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- Provide assured income to sugarcane farmers.
- Shield farmers from market price volatility.
- Ensure sustainable production and protect farm livelihoods.
- Support a stable and fair supply chain in the sugar sector.
- Process of Fixing FRP:
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- Cabinet Committee on Economic Affairs (CACP) calculates FRP based on: Cost of production (A2 + FL), Sugar recovery rate, Demand-supply trends and Profit margin for farmers.
- Consultations held with State Governments, industry stakeholders, and farmers’ bodies.
- Key Features of the FRP System:
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- Annual Announcement: FRP is declared each year by the Government before the sugarcane crushing season (October–September).
- State Advisory Price (SAP): Some states fix a higher SAP than FRP, in such cases, sugar mills must pay the higher of the two.
- 14-Day Payment Rule: Sugar mills are legally bound to pay farmers within 14 days of cane delivery.
- Penalty Provision: If mills delay payments, they are liable to pay interest and may face license cancellation.
- Lower Recovery Protection: Even if sugar recovery falls below 9.5%, farmers are guaranteed a minimum of ₹329.05/qtl, with no deduction applied.
