FRP usually announced in June as sugar season starts from October; new price hikes by Rs 25 at Rs 340 per quintal
File photo: Vikas Choudhary / CSE
In a surprising move aimed at appeasing approximately 50 million sugarcane farmers across the nation, the central government unveiled a strategic manoeuvre on the evening of February 21, 2024. During a meeting of the cabinet committee on economic affairs, chaired by Prime Minister Narendra Modi, a decision was reached to elevate the fair and remunerative price (FRP) of sugarcane by eight per cent.
This decision comes as a departure from the norm, as FRP adjustments are typically announced around June, ahead of the sugar season commencing in October. Notably, last year’s FRP increase for sugarcane was sanctioned on June 28, 2023.
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As per a late-night release from the Press Information Bureau (PIB), the cabinet committee ratified the FRP for sugarcane at Rs 340 per quintal for the 2024-25 sugar season, pegged with a sugar recovery rate of 10.25 per cent. This marks a historic surge in sugarcane prices, amounting to approximately 8 per cent higher than the preceding season’s FRP. The revised FRP is slated to come into effect from October 1, 2024.
The release claimed that the FRP, which exceeds the cost of sugarcane by 107 per cent, is poised to bolster the prosperity of sugarcane farmers. Moreover, it contended that despite already paying the highest sugarcane prices globally, the government remains committed to providing the world’s most affordable sugar to domestic consumers.
The initiative is poised to benefit over 50 million sugarcane farmers, including their families, along with numerous stakeholders within the sugar sector, the release said. This move is touted as a realisation of Modi’s pledge to double farmers’ income.
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Following the Cabinet Committee’s nod, sugar mills will adhere to the prescribed rate of Rs 340 per quintal for sugarcane at a recovery rate of 10.25 per cent. Furthermore, for every 0.1 per cent increase in recovery, farmers stand to gain an additional price of Rs 3.32, while a corresponding deduction will be made for each 0.1 per cent decrease in recovery.
However, it’s noteworthy that the minimum sugarcane price stands at Rs 315.10 per quintal, applicable at a recovery rate of 9.5 per cent, ensuring farmers a baseline FRP at the rate even in instances of low sugar recovery.
Meanwhile, the ongoing protests by farmers in Punjab-Haryana, spanning over the past 10 days, have centred on demands for a legal guarantee of minimum support prices for crops. Despite four rounds of discussions between farmers and the government, a resolution remains elusive.
The latest proposition from the government, offering legal assurances for only five crops over the next five years, was met with resistance from farmers, sparking speculation of escalating tensions between the two parties. Some believe that the government’s premature announcement of FRP might be a response to mounting pressure from these protests.
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The press release said that in the last 10 years, the Modi government has ensured that farmers get the right price for their crops at the right time, citing the clearance of 99.5 per cent of cane dues from the previous sugar season (2022-23) and 99.9 per cent from all other seasons, resulting in historically low pending dues in the sugar sector.
Furthermore, due to timely policy interventions, sugar mills have achieved self-reliance, obviating the need for financial assistance from the government since the fiscal year 2021-22, the release claimed. Nonetheless, the central government remains committed to ensuring ‘assured FRP and assured procurement’ of sugarcane for farmers.
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