The Centre on Wednesday hiked the minimum price that mills have to pay to sugarcane growers by Rs 5 per quintal to Rs 290 a quintal for 2021-22 (October-September) marketing year. However, it ruled out any immediate increase in the selling price of sugar. 

The decision to increase the Fair and Remunerative Price (FRP) of sugarcane for the 2021-22 marketing year was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) on Wednesday. 

The government had fixed sugarcane FRP at Rs 285 per quintal for the current 2020-21 marketing year. 

Briefing the media after the Cabinet meeting, Food and Consumer Affairs Minister Piyush Goyal said that the FRP had been increased to Rs 290 per quintal for a basic recovery rate of 10 per cent.

Mr Goyal said that a premium of Rs 2.90 per quintal would be provided for each 0.1 per cent increase in recovery over and above 10 per cent. There would be a reduction in FRP by Rs 2.90 per quintal for every 0.1 per cent decrease in recovery. 

The minister added that the government had decided not to deduct FRP where recovery was below 9.5 per cent to protect interests of farmers. “Such farmers will get Rs 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of Rs 270.75 per quintal in the current sugar season 2020-21,” Mr Goyal said. 

The cost of production of sugarcane for the sugar season 2021-22 was Rs 155 per quintal. The FRP of Rs 290 per quintal at a recovery rate of 10 per cent is higher by 87 per cent over production cost, he said, adding that sugarcane farming was more remunerative than that of other crops.