Cabinet approves hike in sugarcane price by 4% to ₹355/quintal
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a hike of ₹15/quintal in the fair and remunerative price (FRP) of sugarcane at ₹355/quintal for the next sugar season beginning October. For the current 2024-25 season, the sugarcane FRP is ₹340.
Sugar mills are legally bound to by sugarcane at FRP, unless States have a separate (usually, higher) State advised price (SAP), which is equally mandatory. The sugar sector is completely controlled by the government (both Centre and States) which decides a host of issues such as location of factories to set up, demarcated area to buy sugarcane, minimum cane price, minimum selling price of sugar, monthly allocation of sugar quota to be sold in domestic market, export permit, ethanol quantity to be sold to oil marketing companies.
Addressing media after the CCEA meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the FRP of ₹355 per quintal has been approved for a basic recovery rate of 10.25 per cent and the rate is 4.41 per cent higher from the rate paid in the sugar season 2024-25.
Premium for recovery
A premium of ₹3.46/quintal for each 0.1 per cent increase in sugar recovery over and above 10.25 per cent will be paid to farmers by the sugar mills in 2025-26 season. Similarly, if the recovery falls below 10.25 per cent, mills will cut ₹3.46/quintal for every 0.1 per cent from the FRP. However, there will be a fixed purchase price of Rs 329.05/quintal for cane with 9.5 per cent recover or less.
Recovery rate is the quantity of sugar produced from crushing the sugarcane – for each quintal of sugarcane crushed, the basic realisation at FRP should be 10.25 kg of sugar.
According to an official statement, the all-India average estimated cost of production (A2+FL) of sugarcane for the sugar season 2025-26 is ₹173/quintal, which means the profit from growing sugarcane is more than double.
5 cr farmers to benefit
Sugar is an important agro-based sector that impacts the livelihood of about 5 crore sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation, the government said.
The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultation with state governments and other stakeholders.
As of April 28, sugar mills have paid ₹85,094 crore as cost of sugarcane, which is about 87 per cent of total cane dues of ₹97,270 crore payable to farmers in the 2024-25 season. Sugar mills have cleared ₹1,11,703 crore out of an estimated cane dues of ₹1,11,782 crore in 2023-24 season.
Published on April 30, 2025
