SALEM: With sugar mills across Tamil Nadu commencing their crushing season, farmers are pressing the state government to raise its special incentive to Rs 700/tonne so that the promised support price of Rs 4,000/tonne can be actualised, as recovery rates across most mills remain below the marginal levels required to trigger higher central payments.
Apart from several privately operated mills, Tamil Nadu has 14 government-run sugar mills in operation this season- 12 cooperative mills and two public sector units, Arignar Anna Sugar Mills Thanjavur and Perambalur Sugar Mills Ltd. While the cane year runs from October 1, 2025, to September 30, 2026, the crushing season began at different times across mills. Two cooperative mills have completed crushing, while operations continue in the remaining. Officials said that final recovery rates can be determined only after the season concludes and that current figures are provisional.
Recovery rates are crucial as they directly determine the Fair and Remunerative Price (FRP) payable to farmers. The FRP is fixed by the central government before the crushing season to ensure a guaranteed price and is decided on the recommendations of the Commission for Agricultural Costs and Prices (CACP). For the 2025-26 season, the FRP is Rs 3,550/tonne at a basic recovery rate of 10.25%, with Rs 34.6/tonne added or deducted for every 0.1% change in recovery. However, farmers will receive a minimum of Rs 3,290.5/tonne as no deduction applies for recovery below 9.5%. The FRP is 4.41% higher than in 2024-25.
Available data shows that around 11 of the 14 government-run mills in the state are recording recovery rates below 9.5%, including several mills where recoveries are below 8%. Only two mills in Dharmapuri consistently record recovery rates above 10%. For most mills, the current recovery profile indicates that farmers will receive only the minimum FRP from the centre.
To bridge the gap between the FRP and the assured support price of Rs 4,000/tonne, farmers said the TN government would need to provide a special incentive of around Rs 700/tonne this season, nearly double last year's incentive of about Rs 349/tonne, which raised the realised price to around Rs 3,500/tonne. Farmers' representatives said the situation has heightened uncertainty. N Palanichamy, state vice president of the Tamil Nadu Sugarcane farmers association said, "The promise was Rs 4,000/tonne, but farmers are getting only Rs 3,500."
In Namakkal, farmers receiving only the minimum FRP plan protest outside the Mohanur Co-operative Sugar Mill. R Velusamy said the promise to raise the support price remains unfulfilled, warning of a steady decline in sugarcane cultivation.
Director of Sugar, Government of Tamil Nadu told TNIE, T. Anbalagan, said only two sugar mills in the State - Subramaniya Siva Co-operative Sugar Mill and Dharmapuri District Co-operative Sugar Mill- record recovery rates above 10%, that across the rest of TN remain below 9.5%.
He said that unlike the FRP fixed by the centre, the state's special incentive is purely a policy decision. "The central government has already announced the FRP. Only if the state government increases its incentive, the realised price of Rs 4,000 per tonne will be attained," he said. Referring to last year, he added, "For the 2024-25 cane year, the incentive was announced during the Budget session, and a similar announcement can be expected this year." While indicating a likely increase, he clarified that "although the incentive has been rising year after year, the exact amount has not yet been notified."
Despite TNIE's efforts, Minister of Agriculture and Farmers' Welfare MRK Paneerselvam was not available for a comment.
Cane year FRP (for recovery rate at 10.25%) Minimum FRP State's special incentive
2021-22 Rs 2900 Rs 2,755.00 Rs 195
2022-23 Rs 3050 Rs 2821.25 Rs 195
2023-24 Rs 3150 Rs 2919.75 Rs 215
2024-25 Rs 3400 Rs 3151.00 Rs 349
2025-26 Rs 3550 Rs 3290.5 (yet to be announced)