FAIR & RENUMERATIVE PRICES

Subject : Economy

Context : Maharashtra sugar mills demand transport subsidy, FRP payment in parts for survival of industry.

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.

Commission for Agricultural Costs and Prices (CACP)

The Commission for Agricultural Costs and Prices (CACP) is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India. It came into existence in January 1965.
It is an advisory body whose recommendations are not binding on Government.