Union cabinet has approved the highest ever fair & remunerative price (FRP) for sugarcane farmers on August 25, 2021.

• FRP for sugarcane has been increased to Rs 290 per quintal for 2021-22. This price will be based on 10% recovery.
• If recovery is less than 9.5%, then farmers will be given a FRP of Rs 275 per quintile.
• This approval is the highest ever FRP and is going to benefit 5 crore sugarcane farmers & their dependents.
• It will also benefit 5 lakh workers who are employed in sugar mills and related ancillary activities.
• FRP has been increased for marketing year October-September.

Use of ethanol is increasing fast in the recent years. Currently, 7.5-8% ethanol is blended into petrol. Percentage of ethanol blended in petrol is likely to increase over 20% in next 2-3 years.

FRP is the minimum price at which sugarcane is purchased by sugar mills from farmers. This price is fixed by Union government based on the recommendations of Commission for Agricultural Costs and Prices (CACP). It is determined under Sugarcane (Control) Order, 1966. FRP is determined by considering various factors like cost of production, domestic & international prices, demand-supply situation, inter-crop price parity etc.

FRP provides margins to farmers irrespective of the facts that sugar mills are generating a profit or not. This price is applicable across the country uniformly. However, some states namely Haryana, Punjab, UP, Uttarakhand, and TN announce a State Advised Price, which is usually higher than the FRP.