The Indian government has increased the minimum price mills must pay to sugarcane growers to Rs 340 per quintal for the 2024-25 season starting in October. This Fair and Remunerative Price (FRP) is the highest announced by the government since 2014 and marks the second time the FRP has been raised by Rs 25 per quintal in a single instance under the current administration.
The FRP of Rs 340 per quintal is set at a sugar recovery rate of 10.25%. This rate represents an 8% increase from the FRP of the 2023-24 season. The new FRP is 107% higher than the A2+FL cost of sugarcane production. The revised FRP will be effective from October 1, 2024.
The decision, made by the Cabinet Committee on Economic Affairs, will benefit over 5 crore sugarcane farmers and others involved in the sugar sector. The FRP ensures a minimum price of Rs 315.10 per quintal at a recovery rate of 9.5%. For every 0.1% increase in recovery, farmers will receive an additional Rs 3.32, and conversely, the same amount will be deducted for every 0.1% decrease.
In terms of payments, 99.5% of cane dues from the 2022-23 season and 99.9% from all other seasons have been paid. For the current 2023-24 season, over 80% of the total outstanding amount has been paid to farmers.
The FRP has seen a gradual increase over the years, starting from Rs 210 per quintal in 2013-14 to Rs 315 per quintal in 2023-24.