The Commission for Agricultural Costs and Prices (CACP) has recommended Rs 20 per quintal hike in the fair and remunerative price of sugarcane at Rs 275 per quintal for next season, a government official said.
The fair and remunerative price (FRP), the minimum price sugar mills have to pay to farmers, has been fixed at Rs 255 per quintal for the 2017-18 season that starts from this month.
"For the next 2018-19 season, the CACP has proposed Rs 275 per quintal FRP for sugarcane factoring (in) cost of production, transportation and crop insurance premium and other expenses," the official told PTI.
A report in this regard was recently submitted to the food ministry by the CACP, a statutory body that advises the government on the pricing policy for major farm produce.
The FRP price is linked to a basic recovery rate of 9.5 per cent, subject to a premium of Rs 2.68 per quintal for every 0.1 per cent point increase in recovery rate.
Usually, the government accepts the CACP recommendations. The proposed increase is also likely to result in states like Uttar Pradesh that do not follow the centrally-announced FRP raising their own advisory prices.
The sugarcane output this year is estimated to be higher at 337.68 mt as against 306.73 mt in 2016-17 crop year on account of good rains, as per the first estimate released by the agriculture ministry.