What is Fair and Remunerative Price?

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What is Fair and Remunerative Price? Blog Image


Recently, the Cabinet Committee on Economic Affairs approved ₹340/quintal as the Fair and Remunerative Price (FRP) of sugarcane for sugar season 2024-25 at sugar recovery rate of 10.25%.

About Fair and Remunerative Price

  • It is the price declared by the government, which mills are legally bound to pay to farmers for the cane procured from them.
  • Who determines it? The FRP is fixed by the Union government (Cabinet Committee on Economic Affairs (CCEA)) on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • The payment of FRP across the country is governed by the Sugarcane Control order, 1966 which mandates payment within 14 days of the date of delivery of the cane.
  • Mills have the option of signing an agreement with farmers, which would allow them to pay the FRP in installments.
  • Delays in payment can attract an interest up to 15 per cent per annum, and the sugar commissioner can recover unpaid FRP as dues in revenue recovery by attaching properties of the mills.
  • The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:-
    • cost of production of sugarcane
    • return to the growers from alternative crops and the general trend of prices of agricultural commodities
    • availability of sugar to consumers at a fair price
    • price at which sugar produced from sugarcane is sold by sugar producers;
    • recovery of sugar from sugarcane;
    • the realization made from sale of by-products viz. molasses, bagasse and press mud or their imputed value
    • reasonable margins for the growers of sugarcane on account of risk and profits

Q1) What is Minimum Support Price (MSP) ?

It is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

Source: Centre increases Fair and Remunerative Price of sugarcane; will be in force from October 1