NEW DELHI, Jan 28: The Food Ministry has proposed a marginal increase of Rs 10 per quintal in the fair and remunerative price (FRP) for sugarcane at Rs 220 for the year starting October 2014.
This is in line with the recommendations of statutory body Commission for Agricultural Costs and Prices (CACP) that advises the Government on pricing policy for major farm produce.
The FRP for sugarcane for the ongoing 2013-14 (October-September) sugar year stands at Rs 210 per quintal.
“CACP has recommended a marginal increase of Rs 10 per quintal after examining the cost of production, surplus availability and international prices among other factors. The Food Ministry has accepted this recommendation,” a senior Government official told reporters.
Comments from different ministries have also been sought on the proposal and the matter is expected to be taken by the Cabinet soon, the official said.
The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, state Governments are free to fix their own state advised price (SAP) and millers can offer any price above the FRP.
While recommending the FRP, the CACP had warned that any increase in the SAP would escalate the production cost and suggested it was high-time that state Governments adopt revenue-sharing formula for sugarcane pricing.
The FRP is fixed after taking into consideration the margins for sugarcane farmers, based on the cost of production of sugarcane, including the cost of transportation.
The FRP is linked to a basic sugar recovery rate of 9.5 per cent, subject to a premium of Rs 1.46 for every 0.1 percentage point increase in recovery above 9.5 per cent.
The recovery rate is the quantity of sugar that is produced from the crushed cane.
Government has pegged sugar output at 24.1 million tonnes for this year, lower than 25 million tonnes achieved in the 2012-13. This year’s output, however, is sufficient to meet the domestic demand of 23.5 million tonnes. (AGENCIES)
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