Thursday, September 16, 2021

Highest ever Fair and Remunerative Price | Benefitting Sugar Farmers

India’s sugar industry is an important agro-based industry that impacts the rural livelihood of about 50 million sugarcane farmers.

To support the sugarcane farmers or Gannakisans of the country, the Cabinet Committee on Economic Affairs has approved a Fair and Remunerative Price of sugarcane for sugar season 2021-2022. The approved Fair and Remunerative Price of sugarcane is Rs. 290/- per quintal for a basic recovery rate of 10%. 290 Rs/qtl is the highest ever Fair and Remunerative Price that has been approved for Sugarcane Farmers.

Let’s get to know more about this decision

The decision provides a premium of Rs. 2.90/qtl for each 0.1% increase in recovery over and above 10%, & reduction in FRP by Rs. 2.90/qtl for every 0.1% decrease in recovery.

It is important to know that the cost of production of sugarcane for the sugar season 2021-22 is Rs. 155 per quintal. This FRP of Rs. 290 per quintal at a recovery rate of 10% is higher by 87.1% over production cost, therefore, it provides the farmers with a return that is more than 50% as compared to the cost. The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices and after consultation with State Governments and other stakeholders.

Under the FRP system, the farmers are not required to wait till the end of the season or for any announcement of the profits by sugar mills or the Government. The new system also assures margins on account of profit and risk to farmers, irrespective of the fact whether sugar mills generate profit or not and is not dependent on the performance of any individual sugar mill.

Protecting the interest of farmers

The proactive approach to protect the interest of farmers could also be witnessed from the decision of no deduction in the case of sugar mills where recovery is below 9.5%. Through this move, farmers will get Rs. 275.50 per quintal for sugarcane in ensuing sugar season 2021-22 in place of Rs. 270.75/qtl in current sugar season 2020-21.

It is worth noting that in the current sugar season, about 2,976 lakh tons of sugarcane worth Rs. 91,000 crores was purchased by sugar mills. It is at an all-time high level & the second highest next to the procurement of paddy crop at Minimum Support Price. Keeping in view the expected increase in the production of sugarcane, about 3,088 lakh tons of sugarcane is likely to be purchased by sugar mills. Moreover, the total remittance to the sugarcane farmers will be about Rs. 1,00,000 crore and the Government through its pro-farmer measures will ensure that sugarcane farmers get their dues on time.

Now, let’s have a look at India’s Sugar Industry.

India is the second-largest producer of sugar in the world after Brazil and is also the largest consumer. Today the Indian sugar industry’s annual output is worth approximately Rs.80,000 crores. There are 732 installed sugar factories in the country with sufficient crushing capacity to produce around 339 lakh MT of sugar. The capacity is roughly distributed equally between private sector units and cooperative sector units.

Generating Employment

The sector impacts rural livelihood of about 50 million sugarcane farmers and employs around 5 lakh workers who are directly working in sugar mills. Apart from this, employment is also generated in various ancillary activities related to transport, trade servicing of machinery and supply of agriculture inputs.

The government is continuously working to ensure the availability of food grains and sugar through appropriate policy instruments and maintenance of buffer stocks of food grains.

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