NEW DELHI: The Centre’s decision to increase the Fair and Remunerative Price (FRP) of sugarcane by 8 per cent, just ahead of the Lok Sabha elections and amid an ongoing farmers’ agitation, will benefit only a section of cultivators, agricultural experts opine.
The increment, with some riders, will restrict the benefits to a section of farmers in Maharashtra, Karnataka, Tamil Nadu and other states where the FRP is implemented.
The Cabinet Committee on Economic Affairs has increased the sugarcane FRP from Rs 315 to Rs 340 for an introductory recovery rate of 10.25%, they added.
According to subject experts, with the riders imposed by the government, the increased FRP would benefit only those farmers whose recovery rate of sugar is 10.25% per quintal for the September 2024 to October 2025 season. The national average recovery rate for the past three months is only 9.79%. The recovery rate is the amount of sugar that sugarcane fetches.
However, Rs 315 per quintal is the minimum price of sugarcane, which is at a recovery of 9.5%, the experts said.
Further, the government incentivises with each increase of recovery by 0.1% over a fixed recovery rate of 10.25%; farmers will get the additional price of Rs 3.32 quintals, while the exact amount will be deducted on reduction of recovery by 0.1%.
In the largest sugar-producing state, Uttar Pradesh, the average recovery rate is around 10.05%. This is 9.6% in the second largest sugar-producing state Maharashtra.
Also, some states such as Uttarakhand, Punjab, Haryana and Uttar Pradesh do not implement the FRP. They instead have State Advisory Price (SAP) fixed by state governments. The SAP ranges from Rs 370 to Rs 391, way more than the FRP.
“So the increment in FRP will have no impact on UP, Punjab, Haryana and Uttarakhand farmers as these states already have higher SAP,” said V M Singh, president of MSP Guarantee Kisan Morcha.
Recovery rate matters
With the government’s riders in place, the increased FRP would benefit only those farmers whose recovery rate of sugar is 10.25% per quintal for the September 2024 to October 2025 season. The national average recovery rate for the past three months is only 9.79%. The recovery rate is the amount of sugar that sugarcane fetches.