The Commission for Agricultural Costs and Prices (CACP) has recommended a marginal increase in the fair and remunerative price (FRP) for sugarcane to Rs 230 per quintal for the 2015-16 season (October-September).
The CACP, a statutory body that advises the government on the pricing policy for major farm produce, submitted a report in this regard to the Food Ministry yesterday.
"CACP has suggested sugarcane FRP of Rs 230 per quintal for the 2015-16 season, which is a Rs 10 per quintal increase from this year," said a senior CACP official.
The government has fixed sugarcane price at Rs 220 per quintal for 2014-15 season beginning October, while it will announce the price for next season after reviewing the CACP's report on FRP for 2015-16.
In the report, CACP has recommended FRP of Rs 230 per quintal for sugarcane that has an average sugar recovery rate of 9.5 per cent, while it has suggested Rs 243 per quintal for cane with a recovery rate of 10.5 per cent.
The FRP 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.
The FRP 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 that is produced from the crushed cane.
Usually, the government accepts the cane price recommended by the CACP.
