New Delhi: Keeping in view the interest of sugarcane farmers, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved Fair and Remunerative Price (FRP) of sugarcane for the upcoming season.
The government has fixed of sugarcane the price at Rs. 290 per quintal for a basic recovery rate of 10 per cent, providing a premium of Rs. 2.90 per quintal for each 0.1 per cent increase in recovery over and above 10 per cent and reduction in FRP by Rs. 2.90 per quintal for every 0.1 per cent decrease in recovery.
The government has also decided not to deduct in case of sugar mills where recovery is below 9.5 per cent, enabling farmers to fetch Rs. 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 against the Rs. 270.75 per quintal in current sugar season 2020-21.
The cost of production of sugarcane for the sugar season 2021-22 is Rs. 155 per quintal. This FRP of Rs. 290 per quintal at a recovery rate of 10% is higher by 87.1 per cent over production cost, thereby giving the farmers a return of much more than 50 per cent over their cost.
In the current sugar season of 2020-21, about 2,976 lakh tons of sugarcane of worth Rs. 91,000 cr was purchased by sugar mills, which is at all time high level and is the second highest next to the procurement of paddy crop at Minimum Support Price.
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Keeping the expected increase in the production of sugarcane in the ensuing sugar season 2021-22, about 3,088 lakh tons of sugarcane is likely to be purchased by sugar mills. The total remittance to the sugarcane farmers will be about Rs. 1,00,000 crore.
The new FRP approved will be applicable for purchase of sugarcane from the farmers in the sugar season, starting October 1. The sugar sector is an important agro-based sector that impacts the livelihood of about five crore sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation.
The FRP has been determined on the basis of recommendations of Commission for Agricultural Costs and Prices (CACP) and after consultation with State Governments and other stake-holders.
In past three sugar seasons about Rs. 22,000 crore revenue was generated by sugar mills and distilleries from sale of ethanol to Oil Marketing Companies (OMCs). According to data available with Press Information Bureau, about Rs. 15,000 crore revenue is being generated by sugar mills from sale of ethanol to OMCs at 8.5 per cent.
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