The Fair and Remunerative Price (FRP) of sugarcane for the sugar season 2022–23 (October–September) was approved on Wednesday by the Cabinet Committee on Economic Affairs (CCEA), which is presided over by Prime Minister Narendra Modi. It is set at 305/QTL (100kg) for a basic recovery rate of 10.25%
The committee further specified that for every 0.1% in recovery above and beyond 10.25%, a premium of 3.05/qtl will be applied, and for every 0.1% in recovery, the premium will be lowered by 3.05/QTL.
However, the government has also decided that there won’t be any deductions for sugar mills where recovery is below 9.5%, setting a minimum rate that the mills will have to pay in order to preserve the interests of sugarcane farmers. In the following sugar season 2022–23, these farmers will receive 282.125/QTL, an increase of around 7 from 275.50/QTL in the current sugar season 2021–22.
The real paid-out cost of producing sugarcane during the sugar season 2022–2023 is 162/QTL, in addition to the cost of family labour. As a result, the FRP of 305/QTL at a recovery rate of 10.25% is more than the cost of production by 88.3%. As a result, this FRP keeps its promise to farmers to return more than 50% of their investment. The FRP for sugar season 2022–23 is 2.6% higher than sugar season 2021–22 at the moment.
What is the FRP and recovery rate?
The government sets the FRP, or Fair and Remunerative Price, which mills are required by law to pay to farmers for the sugarcane they buy from them.
The nationwide payment of FRP is governed by the Sugarcane Control Order of 1966. Payment must be made within 14 days of the cane’s delivery date, according to the order. Farmers have the opportunity to pay the FRP in instalments by entering into a contract with mills.
The FRP is based on the cane’s ability to recover sugar. The ratio of sugar produced to cane crushed, stated as a percentage, is called sugar recovery. Higher recovery results in higher FRP and higher sugar production.