The Cabinet, on Wednesday, decided to increase the fair and remunerative price (FRP) of sugarcane by ₹10 per quintal at ₹285 during the forthcoming sugar season of 2020-21.

Last year, the government did not increase the FRP – the price at which sugar mills buy sugracane from farmers – and retained ₹275 per quintal announced in 2018 as the sugarcane floor price. The FRP is for a recovery rate of 10 per cent. For every 0.1 per cent increase in recovery, farmers will get an additional ₹2.85 per quintal and, similarly, a reduction of 0.1 per cent in recovery below 10 per cent will cost them the same amount per quintal.

VM Singh, President, Rashtriya Kisan Mazdoor Sangh, wondered how the government could justify this increase when input costs were going up and price index was higher. “The same government, which has been happily increasing the diesel prices on a daily basis, thinks a ₹10 increase is good enough for farmers,” said Singh, who is also the convenor of the All-India Kisan Sangarsh Coordination Committee.

He said the Yogi Adityanath government in Uttar Pradesh, in a reply to a question in the State Assembly in September 2018, had stated that the average cost of sugarcane cultivation in the State was ₹290 a quintal. “What they have announced today doesn’t even cover that cost,” he said.

Abinash Verma, Director General of Indian Sugar Mills Association (ISMA), said the increase in FRP was on expected lines. But he was surprised that the government did not announce any decision on minimum selling price of sugar (MSP).

At present, there is a mismatch between the price of sugarcane and sugar price in the country. This will further aggravate if there is no matching increase in MSP. In fact, a committee headed by Home Minister Amit Shah, had recently recommended an increase of ₹2 in sugar prices to ₹33 a kg.

“We hope the government will soon decide the increase in the MSP, including on account of further increase in FRP to ₹285 per quintal, otherwise clearance cane price arears and payment of higher FRP to farmers will get dadly affected,” said Verma.

According to Singh, sugar mills in UP owe farmers a sum of ₹13,000 crore.