The government on Wednesday decided to increase the minimum price sugar mills pay to cane growers by Rs 20 per quintal for the next marketing year starting October, sources said. After the price revision the new rate will be Rs 275 per quintal.
The Fair and Remunerative Price (FRP), which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), they added.
It may be recalled that the government had recently announced a sharp increase in the minimum support price (MSP) of kharif (summer-sown) crops.
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The Commission for Agricultural Costs and Prices (CACP) had recommended Rs 20 per quintal hike in the FRP of sugarcane at Rs 275 per quintal for the next season.
The CACP is a statutory body that advises the government on the pricing policy for major farm produce. Usually, the government accepts the CACP recommendations.
The increase is also likely to result in states like Uttar Pradesh, which do not follow the centrally-announced FRP, raising their own advisory prices.
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Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called 'state advisory prices' (SAPs), which are usually higher than the Centre's FRP.
Sugar production in India is estimated to reach a record 32.25 million tonnes in the current 2017-18 marketing year (October-September). Country is the world's second largest producer after Brazil.
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(With PTI inputs)