Fair and Remunerative Price (FRP), a price declared by the government, is a significant aspect of sugarcane production in India. It’s the mandated payment mills are bound by law to pay farmers for procured cane. FRP is based on the Rangarajan Committee report, which recommended a reorganization of the sugarcane industry.
Changes in the Government Resolution
Recently, the Maharashtra Government issued a resolution allowing sugar mills to split the FRP payment into two tranches. The first instalment must be paid within 14 days of cane delivery, based on the district’s average recovery. The second instalment would come within 15 days of the mill’s closure, taking into account the final recovery, which includes sugar and ethanol produced from ‘B heavy’ or ‘C’ molasses.
Farmers’ Protest in Maharashtra
Farmers in Maharashtra argue that the new method would hurt their earnings. They express concern because while FRP will be paid in instalments relying on an unknown variable, they are still expected to meet their bank loans and other expenses. Also, they require a lump sum at the start of the season (October-November) since their following crop cycle depends on it.
The Role of FRP in the Indian Economy
The FRP is a crucial element in the Indian economy, particularly in agricultural pricing and sugar production. Its calculation factors in the cost of sugarcane production, returns from alternative crops, trends in agricultural commodity prices, consumer access to fairly priced sugar, recovery of sugar from sugarcane, and profits and risks for sugarcane growers.
FRP Payment Method
The FRP payment is based on the recovery of sugar from the cane, with the FRP fixed at Rs 2,900/tonne at a base recovery of 10% for the sugar season of 2021-22. The ratio between sugar produced and cane crushed, expressed as a percentage, defines sugar recovery. The higher the recovery, the higher the FRP and sugar production.
About Sugarcane
Sugarcane thrives in temperatures between 21-27°C, rainfall of around 75-100 cm, and deep, rich loamy soil. India, the second-largest producer globally after Brazil, has all types of soils from sandy loam to clay loam that can support its growth given they are well-drained. Sugarcane requires manual labour from sowing to harvesting and is the key source of sugar, gur (jaggery), khandsari, and molasses.
Top Sugarcane Producing States
Major sugarcane producing states include Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, and Bihar.
Government Initiatives for Sugarcane Production and the Sugar Industry
The government has introduced several initiatives to support sugarcane production and the sugar industry, among which are the Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) and the National Policy on Biofuels.