Sugarcane farmers in for a marginal hike in prices

Says marginal increase in the FRP has been recommended after carefully examining the cost of production, surplus availability and international prices

The Commission for Agricultural Costs and Prices (CACP) has recommended a marginal increase in the fair and remunerative price (FRP) for sugarcane to Rs 220 per quintal for the 2014-15 sugar year (October-September).     

The CACP is a statutory body and advises the government on the pricing policy for major farm produce.”We have recommended a marginal increase in the FRP for cane to Rs 220 per quintal for 2014-15 after carefully examining the cost of production, surplus availability and international prices among other factors,” a senior CACP official said.

While the FRP for sugarcane for the 2013-14 sugar year, beginning next month, has been fixed at Rs 210 per quintal, the CACP’s recommendation on raising this price would be applicable from October 2014. The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, state governments are free to fix their own state advised price (SAP) and millers can offer any price above the FRP.    

While recommending the FRP, the CACP has warned that any increase in the SAP would escalate the production cost and suggested it is high-time that state governments adopt revenue-sharing formula for sugarcane pricing. The FRP is fixed after taking into consideration the margins for sugarcane farmers, based on the cost of production of sugarcane, including the cost of transportation. The FRP is linked to a basic sugar recovery rate of 9.5 per cent, subject to a premium of Rs 1.46 for every 0.1 percentage point increase in recovery above 9.5 per cent.

The recovery rate is the quantity of sugar that is produced from the crushed cane.      

Usually, the government accepts the cane price recommended by the CACP.