FAIR AND REMUNERATIVE PRICE

Subject: Economy

Context: Food Minister PiyushGoyal on Friday said the government cannot reduce the FRP, the minimum price at which sugar mills buy cane from farmers, and asked the industry to be efficient, profitable and diversify product portfolio with less dependency on the central subsidy.

Concept:

• Fair and remunerative price (FRP) is the minimum price at which rate sugarcane is to be purchased by sugar mills from farmers.
• The FRP is fixed by Union government on the basis of recommendations of Commission for Agricultural Costs and Prices (CACP).
• The ‘FRP’ of sugarcane is determined under Sugarcane (Control) Order, 1966.
• Recommended FRP is arrived at by taking into account various factors (cost of production, demand-supply situation, domestic & international prices, inter-crop price parity etc.
• FRP assures margins to farmers, irrespective of whether sugar mills generate a profit or not.
• This will be uniformly applicable all over the country. Besides FRP, some states such as Punjab, Haryana, Uttarakhand, UP and TN announce a State Advised Price, which is generally higher than the FRP.