The Union Cabinet has approved the determination of ‘Fair and Remunerative Price’ of sugarcane payable by sugar mills for 2019-20 sugar season.
About:
Background: Price of sugarcane is fixed by the centre/State, while the price of sugar is market determined.
What is it? Fair and remunerative price (FRP) is the minimum price at which rate sugarcane is to be purchased by sugar mills from farmers.
Who determines it? The FRP is fixed by Union government on the basis of recommendations of Commission for Agricultural Costs and Prices (CACP).
Rules: The ‘FRP’ of sugarcane is determined under Sugarcane (Control) Order, 1966.
Methodology: Recommended FRP is arrived at by taking into account various factors (cost of production, demand-supply situation, domestic & international prices, inter-crop price parity etc.
Benefits: FRP assures margins to farmers, irrespective of whether sugar mills generate a profit or not.
This will be uniformly applicable all over the country. Besides FRP, some states such as Punjab, Haryana, Uttarakhand, UP and TN announce a State Advised Price, which is generally higher than the FRP.
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