The Cabinet on Wednesday approved the fair and remunerative price (FRP) of sugarcane, the price at which millers buy from farmers, for 2020-21), increasing the minimum by Rs10 to Rs 285 per quintal.
The sugarcane sale season will start in October 2020. The FRP, which is provided for by the Sugarcane (Control) Order, 1966, is the minimum price that sugar mills have to pay to sugarcane farmers.
Sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs), which are usually higher than the Centre’s FRP.
According to government estimates, the country’s total sugar production is pegged to be 28-29 million tonne in the current year ending next month, compared to 33.1 million tonnes during 2018-19 due to a sharp fall in cane acreage in Maharashtra and Karnataka.
The FRP of Rs 285 per quintal applied for a basic recovery rate of 10%, which is the amount of sugar recovered from a given quantity of cane. A premium of Rs 2.85 per quintal for every 0.1% increase above 10% in the recovery has been allowed.
However, there will a reduction in FRP by Rs 2.85 per quintal for every 0.1 percentage point decrease in recovery in respect of those mills whose recovery is below 10% but above 9.5%.
However, for mills having recovery 9.5 % or below, the FRP is fixed at Rs 270.75 per quintal.
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