The Commission for Agricultural Costs and Prices (CACP) has recommended the government to keep the fair and remunerative price for sugarcane unchanged at Rs 230 per quintal for the 2016-17 season (October-September).
The CACP is a statutory body that advises the government on the pricing policy for major farm produce.
"The CACP has suggested sugarcane fair and remunerative price (FRP) at Rs 230 per quintal for the 2016-17 season after carefully examining the cost of production, surplus availability and international prices of sugar and other factors," sources said.
For the ongoing 2015-16 season, the government had raised the FRP of cane by Rs 10 to Rs 230 per quintal.
The fair and remunerative price is the minimum price that sugarcane farmers are legally guaranteed. However, state governments are free to fix their own state-advised price (SAP) and millers can offer any price above the FRP.
The FRP is fixed after taking into consideration the margins for sugarcane farmers, based on the cost of production of sugarcane including the cost of transportation.
It is linked to a basic sugar recovery rate of 9.5 per cent, subject to a premium of Rs 1.46 for every 0.1 percentage point increase in recovery above 9.5 per cent. The recovery rate is the quantity of sugar produced from the crushed cane.
Usually, the government accepts the cane price recommended by the CACP.
