Fair and Remunerative Price

News: The Maharashtra government has issued a government resolution which will allow sugar mills to pay the basic fair and remunerative price (FRP) in two tranches. Sugar mill owners have welcomed the move. However, farmers are not happy with it.

Details:

  • FRP is the price declared by the government, which mills are legally bound to pay to farmers for the cane procured from them. The payment of FRP across the country is governed by The Sugarcane Control order, 1966. It mandates payment within 14 days of the date of delivery of the cane.
  • The FRP is based on the recovery of sugar from the cane. For the sugar season of 2021-22, FRP has been fixed at Rs 2,900/tonne at a base recovery of 10 per cent. Sugar recovery is the ratio between sugar produced versus cane crushed, expressed as a percentage. The higher the recovery, the higher is the FRP, and higher is the sugar produced.
  • The Central Government announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and announced by the Cabinet Committee on Economic Affairs (CCEA). CCEA is chaired by the Prime Minister of India.
  • The FRP is based on the Rangarajan Committee report on reorganizing the sugarcane industry.
  • Assured payment is one of the major reasons why cane is a popular crop with farmers.
  • Delays in payment can attract an interest up to 15 per cent per annum, and the sugar commissioner can recover unpaid FRP as dues in revenue recovery by attaching properties of the mills.
  • Farmers argue that this method would impact their incomes. They point out that while FRP will be paid in installments, and will depend on an unknown variable, their bank loans and other expenses are expected to be paid for as usual. Also, farmers mostly require a lumpsum at the beginning of the season (October-November), because their next crop cycle depends on it.

Sugarcane:

  • Temperature: Between 21-27°C with hot and humid climate.
  • Rainfall: Around 75-100 cm.
  • Soil Type: Deep rich loamy soil.
  • Top Sugarcane Producing States: Uttar Pradesh > Maharashtra > Karnataka > Tamil Nadu > Bihar.
  • India is the second largest producer of sugarcane after Brazil.