The Centre has hiked the minimum price that sugar mills must pay to cane farmers by ₹10 per quintal for the 2020-21 sugar season, which runs from October to September.
The decision was taken by the Cabinet Committee on Economic Affairs at its meeting on Wednesday, according to an official statement. The Fair and Remunerative Price for sugarcane has been set at ₹285/quintal, in comparison to the previous year’s rate of ₹275/quintal, for mills which have a sugar recovery rate of 10%.
Although cane acreage has dropped in Maharashtra and Karnataka this year and a drop in production is expected, cash strapped mills still have arrears in payment to farmers.
FRP determination is in the interest of growers, said the statement, adding that the increase was in line with the recommendations made by the Commission for Agricultural Costs and Prices.
A premium of ₹2.85 per quintal will be paid for every 0.1% increase above the 10% sugar recovery rate, while a similar reduction will be levied for lower rates. For mills with recovery of 9.5% or below, however, the FRP has been fixed at ₹270.75 per quintal.