Cabinet– Government ups sugarcane FRP to Rs 275

July 18, 2018
New Delhi: With an eye on the 2019 Lok Sabha elections, the government on Wednesday sweetened its deal for the sugarcane farmers: it approved a Rs 20 per quintal increase in the minimum price that sugar mills will have to pay to farmers for the 2018-19 season starting October.

The decision to increase the Fair and Remunerative Price (FRP) from Rs 255 per quintal to Rs 275 was taken during the meeting of the Cabinet Committee on Economic Affairs (CCEA).

The FRP is the minimum price legally guaranteed for sugarcane farmers.

“We have approved the FRP of sugarcane at Rs 275 per quintal for a basic recovery rate of 10 per cent for sugar season 2018-19, providing a premium of Rs 2.75 per quintal for each 0.1 per cent increase in recovery over and above 10 per cent,” Law and Justice Minister Ravi Shankar Prasad told reporters after the meeting.

“The cost of sugar production is estimated to be only Rs 155 per quintal against which we have decided to give an FRP of Rs 275 per quintal. This is 77.42 per cent higher than the cost of production,” he said.

With Lok Sabha elections next year, the move is seen as the government’s attempt to woo the farmers.

Earlier this month, the government had hiked the Minimum Support Price (MSP) for various crops providing farmers a profit of 50 per cent or more over “cost of production”, for 14 notified kharif crops for 2018-19.

As per the estimates issued by industry body Indian Sugar Mills Association (ISMA), total sugar production in season 2018-19 starting October is expected to be 35-35.5 million tonnes.

Prasad said that the total remuneration for sugarcane to farmers for the year 2018-19 is estimated to be Rs 83,000 crore.(IANS)