Farm cost panel raising recovery rate to 10.5% negates sugarcane FRP hike to ₹305/quintal

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18 April 2022, New Delhi: Sugarcane farmers can expect only a 2.5 per cent increase in their selling price next year as the Commission for Agricultural Costs and Prices (CACP) has raised the recovery rate by 0.25 per cent on which the new price is to be calculated. If the government accepts the recommendation, the Fair and Remunerative Price (FRP) of sugarcane will be ₹305/quintal at 10.25 per cent recovery rate for the 2022-23 season (October-September).

For current sugar season, the FRP is ₹290/quintal at 10 per cent recovery rate. The more the recovery, higher will be the cane price. Recovery rate is the quantum of sugar produced out of sugarcane and that depends on the juice content.

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Though the CACP said the recommended FRP is 88 per cent more than the A2+FL (actual paid out cost plus imputed value of family labour) cost of production and 30 per cent above the C2 cost (comprehensive cost including imputed rent and interest on owned land and capital) estimated for 2022-23, it is in fact a mere 2.5 per cent increase if the recovery rate is kept at 10 per cent.

“Considering the current global situation when India is able to export record quantities without any subsidy, the CACP’s recommendation on the revenue-sharing formula should be accepted this year to put an end to the problem of recurring cane price arrears,” an industry official said.

With continuing competition among States like Punjab and Haryana in fixing the State Advised Price (SAP), which is also compulsory for mills to pay as per a court order, the Centre should take all States into confidence to end the system of separate price for each State on the principle of ‘one nation one rate’ similar to the MSP, said the industry official. 

Just as the practice of States declaring a bonus for wheat and paddy was abolished in 2014, the Centre should make cane price uniform so that mills in one State are not disadvantaged by having to pay more than in another State, he added. 

Farmer leader and former MP Raju Shetti said: “It is highly unfair and the CACP has done injustice to cane farmers. Because of higher prices of fertilisers, pesticides, and diesel, a sugarcane farmer’s cost of production has gone up by ₹20/quintal if he is harvesting 7 tonne from one acre. The government should not accept the recommendation and ask the CACP to revise it.”

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