Legal Framework and Determination Process
The Fair and Remunerative Price is backed by statutory regulations to govern cane procurement across India.
Key statutory features:
- Governing legislation: Mandated under the Sugarcane (Control) Order, 1966, issued under the Essential Commodities Act, 1955.
- Approving authority: Fixed by the Cabinet Committee on Economic Affairs (CCEA) following recommendations from the CACP.
- Replaced old SMP: Introduced in the 2009-10 sugar season, replacing the older Statutory Minimum Price (SMP) mechanism.
- Payment timeline: Under statutory provisions, sugar mills are legally required to disburse cane payments to farmers within 14 days of delivery.
Sugar Recovery Linkage and Premiums
FRP is tied directly to the industrial sucrose content extracted from sugarcane.
Recovery calculation dynamics:
- Baseline recovery: Benchmark FRP is declared for a specific baseline sugar recovery rate (such as 10.25 percent).
- Recovery premium: Farmers supplying cane to mills with higher sugar extraction receive an additional statutory premium per quintal for every decimal increase above the baseline.
- Deduction limits: While deductions apply for recovery below the baseline, statutory floors prevent deductions below designated minimum threshold percentages.
FRP vs State Advised Price (SAP)
Sugarcane pricing in India involves both central benchmarks and state-specific statutory declarations.
Important pricing distinctions:
- Central FRP: Applicable uniformly nationwide as a minimum mandatory floor price.
- State Advised Price (SAP): Major sugarcane states (such as Uttar Pradesh, Punjab, and Haryana) declare an independent SAP, which is typically higher than the central FRP.
- Mill obligation: In states where an SAP is notified, local sugar factories are legally obligated to settle farmer dues at the state-advised rate.
Official source
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Commission for Agricultural Costs and Prices (CACP) ↗Related on KisanPe
Common questions
What is the full form of FRP in agriculture?
FRP stands for Fair and Remunerative Price, the statutory minimum price mandated for sugarcane procurement in India.
Which body recommends the FRP for sugarcane?
The Commission for Agricultural Costs and Prices (CACP) recommends the FRP, which is approved by the Cabinet Committee on Economic Affairs.
Within how many days must sugar mills pay farmers after cane delivery?
Under the Sugarcane (Control) Order, sugar mills are required to pay cane dues within 14 days of supply.
General guidance, not personal advice. For your farm, ask your local Krishi Vigyan Kendra or agriculture officer.
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