Question

UPSC Prelims 2015 Question:

The Fair and Remunerative Price (FRP) of sugarcane is approved by the

  1. 1. Cabinet Committee on Economic Affairs.
  2. 2. Commission for Agricultural Costs and Prices.
  3. 3. Directorate of Marketing and Inspection, Ministry of Agriculture
  4. 4. Agricultural Produce Market Committee

Answer (Detailed Solution Below)

Option 1: Cabinet Committee on Economic Affairs.

Detailed Solution

Explanation:

  • With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the ‘Fair and Remunerative Price (FRP)’ of sugarcane for 2009-10 and subsequent sugar seasons.

  • The cane price (FRP) is approved by the Cabinet Committee of Economic Affairs (CCEA) on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) in consultation with the State Governments and after taking feedback from associations of the sugar industry.

Therefore, option (1) is the correct answer.

Knowledge Box 

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

Subject: Economics | Agriculture and Food Management

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