Cabinet Increases FRP for Sugarcane to ₹355 per Quintal for 2025-26 Season

 

The Government of India has approved a hike in the Fair and Remunerative Price (FRP) of sugarcane for the 2025-26 season to ₹355 per quintal, ensuring better returns for farmers. Special provisions have also been made to safeguard the interests of those with lower sugar recovery rates.

Summary in Short Points:

• FRP Increased: ₹355 per quintal for 2025-26 (up from ₹340 in 2024-25).
• Applicable Recovery Rate: Based on 10.25% sugar recovery.
• Incentive Mechanism: ₹3.46 premium/penalty per 0.1% change in recovery rate.
• Farmers with <9.5% recovery: Guaranteed ₹329.05 per quintal, no deductions.
• Cost of Production: ₹173 per quintal.
• Beneficiaries: Around 5 crore farmers and 5 lakh mill workers.
• Dues Status: 99.92% of 2023-24 sugarcane dues cleared; 87% cleared for 2024-25 (till April 28).
• Basis for FRP: Recommendations from CACP and consultations with states.

Detailed Explanation (RAS Mains Focused):

What is Fair and Remunerative Price (FRP)?

FRP is the minimum price that sugar mills must pay to farmers for sugarcane, fixed by the Central Government under the Sugarcane (Control) Order, 1966. It aims to ensure reasonable returns to cane farmers, irrespective of market volatility.

Key Highlights of 2025-26 FRP Hike:

1.    FRP Raised: ₹355/quintal at a basic recovery rate of 10.25%.

2.    Cost-Return Margin: Farmers earn more than double the cost of production (₹173/quintal), ensuring a 100%+ margin.

3.    Progressive Recovery Incentives: Encourages better quality and efficiency in farming and processing:

• ₹3.46 extra for every 0.1% recovery above 10.25%.
• ₹3.46 deducted for every 0.1% recovery below 10.25% (but not below 9.5%). 

Special Protection for Low Recovery Farmers:

• Farmers whose produce yields less than 9.5% recovery will still get ₹329.05/quintal.
• No deduction policy for these farmers aims to reduce their financial hardship.

Economic and Employment Significance:

• Sugarcane farming supports ~5 crore farmers.
• Sugar mills employ ~5 lakh workers directly.
• Ancillary sectors like transport and farm labor also benefit.
• Ensuring stable pricing through FRP helps maintain rural income stability, especially in states like Uttar Pradesh, Maharashtra, and Karnataka.

Payment Status & Government Efforts:

• In 2023-24, 99.92% of dues have been paid.
• For the current season, 87% dues have been cleared till April 28, indicating strong enforcement mechanisms.
• Payment efficiency is crucial to address rural liquidity and debt cycles.

Role of CACP and States:

• FRP is based on the Commission for Agricultural Costs and Prices (CACP) analysis.
• Inputs from State Governments and farmer organizations are considered before fixing the rate.

RAS Mains Relevance:

• Topic: Agricultural Pricing, Centre-State Relations, Rural Economy, Minimum Support Prices, and Agricultural Reforms.
• Governance & Policy Angle: Reflects cooperative federalism in price fixation.
• Helps understand agrarian distress mitigation strategies and farmer welfare schemes.

Conclusion:

The increase in sugarcane FRP reflects the government’s intent to balance farmer welfare with industry viability. By ensuring no deductions for low recovery and providing premium incentives, it creates a fair ecosystem for all stakeholders. Timely payments and proactive policy signals are vital for rural sustainability and trust in agri-marketing frameworks.

MCQs:

1. The Fair and Remunerative Price (FRP) of sugarcane for the 2025-26 season has been fixed at what rate for a 10.25% recovery rate?
A) ₹329.05
B) ₹340
C) ₹355
D) ₹370
Answer: C) ₹355

2. Which organization’s recommendation forms the basis for the FRP of sugarcane in India?
A) NITI Aayog
B) NABARD
C) Commission for Agricultural Costs and Prices (CACP)
D) Ministry of Rural Development
Answer: C) Commission for Agricultural Costs and Prices (CACP)