The Fair and Remunerative Price, more commonly known as FRP, is the price set by the government that sugar mills need to pay to farmers for the sugarcane they procure. Any delay in payments by the mills can lead to weighty interest charges of 15% per annum. In a recent update, the Cabinet Committee on Economic Affairs (CCEA) has decided not to make any deductions for sugar mills where recovery is below 9.5%. Such farmers will get Rs 291.975 per quintal for sugarcane in the upcoming sugar season, an increase from Rs 282.125 per quintal in the current sugar season.
The Intricacies of FRP
Mills are legally obligated to pay FRP to farmers for their sugarcane. They often sign agreements with farmers in order to pay the FRP in instalments. The FRP is determined based on recommendations made by the Commission for Agricultural Costs and Prices (CACP) and announced by the CCEA. Factors considered include the cost of sugarcane production, returns from alternative crops, and trends in agricultural commodity prices.
A Description of Sugarcane
Sugarcane thrives best in temperatures between 21-27°C with hot and humid climate and requires rainfall around 75-100 cm. Deep rich loamy soil is ideal for its growth. India, being the second largest producer of sugarcane after Brazil, grows it on a variety of soils from sandy loam to clay loam as long as these soils are well drained.
Sugarcane Production in India
India’s top states for sugarcane production are Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, and Bihar. Sugarcane requires manual labour from sowing to harvesting and is the main source of sugar, gur (jaggery), khandsari and molasses.
Government Support for Sugarcane Production
There are several government initiatives in place to support sugarcane production and the sugar industry. These include Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) and National Policy on Biofuels.
Introducing the PM-PRANAM Scheme
A more recent initiative, approved by the Cabinet Committee on Economic Affairs (CCEA), is the PM-PRANAM scheme. Standing for PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth, it was first announced in the 2023-24 Budget by the Union government. The scheme is aimed at reducing the use of chemical fertilizers by incentivizing states to adopt alternative fertilizers.
The Objectives and Features of PM-PRANAM Scheme
The PM-PRANAM scheme seeks to promote the balanced use of fertilizers in conjunction with biofertilizers and organic fertilizers, thereby helping to reduce the subsidy burden on chemical fertilizers. Additionally, the PM-PRANAM scheme will encourage sustainable agricultural practices, which is expected to boost soil fertility, reduce environmental pollution, and support long-term agricultural productivity.
Exploring Biofertilizers
Biofertilizers consist of a carrier medium rich in live microorganisms that can increase soil nutrients when applied to seed, soil or living plants. They contain different types of fungi, root bacteria or other microorganisms that form a mutually beneficial relationship with host plants as they grow in the soil. Biofertilizers can be classified into Bacterial, Fungal, Algal and Actinomycetes Biofertilizers based on their microorganism content.
Examining the Urea Subsidy Scheme
The urea subsidy scheme has recently been extended until March 2025 with an allocation of ₹3.68 lakh crore. A nutrient-based subsidy of ₹38,000 crore has been sanctioned for the Kharif season of 2023-24. These measures provide a significant boost to the agricultural sector. The reduction in urea consumption by a state, compared to its average consumption over the previous three years, will determine the eligibility for subsidy savings and grants under the PM-PRANAM scheme.
Both the FRP and PM-PRANAM scheme are key facilitators in the agricultural sector, particularly in relation to the sugarcane industry. These measures are expected to bring about increased productivity and sustainability in the longer term. Additionally, they should lead to better remuneration for farmers and make farming a more profitable and sustainable occupation.
