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The Cabinet on Wednesday hiked the fair and remunerative price (FRP) of sugarcane for the coming season by ₹5 per quintal to ₹290 per quintal.
The FRP would be for a basic recovery rate of 10 per cent and farmers would get an additional ₹2.90 per quintal for every additional 0.1 per cent increase in recovery. Similarly there would be ₹2.9 per quintal decrease in FRP for each 0.1 per cent decrease in recovery up to 9.5 per cent. However, there would be no reduction in FRP beyond ₹275.50 per quintal even if the recovery falls below 9.5 per cent, said Piyush Goyal, Minister for Commerce and Industry as well as Consumer Affairs, Food and Public Distribution, during a briefing on Cabinet decisions.
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India’s sugar season commences on October 1 and continues till September next year.
Goyal said in the current sugar season 2020-21, about 2,976 lakh tonnes of sugarcane worth ₹91,000 crore was purchased by sugar mills, which is an all-time high and the second highest after paddy procurement. Of this, ₹85,000 crore has already been paid to farmers, he said.
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Given the expected increase in sugarcane production in the ensuing sugar season 2021-22, about 3,088 lakh tonnes of sugarcane is likely to be purchased by sugar mills, and the total remittance to sugarcane farmers will be about ₹1,00,000 crore. “The government, through its pro-farmer measures, will ensure that sugarcane farmers get their dues in time,” the Minister said.
Meanwhile, Indian Sugar Mills Association welcomed the government decision to increase the FRP.
“The sugar industry may not feel overburdened with the government’s decision to increase sugarcane FRP for 2021-22 SS [sugar season] by ₹5 per quintal from ₹285 per quintal to ₹290 per quintal. After no increase in FRP in 2019-20 SS, the FRP was increased in 2020-21 SS by ₹10 per quintal from ₹275 per quintal to ₹285 per quintal. The current decision to increase the FRP for 2021-22 SS by 1.75 per cent, therefore, seems quite reasonable. It is not a major increase, as compared to the past, when government had in a couple of years increased cane FRP by ₹25–40 per quintal of cane,” ISMA Director General Abinash Verma said.
But Verma also said that, with the increased FRP, the industry would expect the government to increase the minimum selling price (MSP) of sugar, too, to ₹34.5–35 a kg.
“It will be necessary to help sugar mills accommodate the higher cane price payment to farmers in the current as also the next season. MSP of sugar has remained static for over 30 months, even though the cane FRP was increased by ₹10 per quintal in 2020-21 SS. The Group of Ministers, Niti Aayog, Committee of Secretaries and several State governments had asked for an increase in MSP of sugar between March and July 2020,” he said.
However, replying to a question from BusinessLine at the media briefing, Goyal said there was no plan to increase the MSP of sugar right now, as sugar firms are being adequately compensated through other schemes.
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