FAIR AND REMUNERATIVE PRICE (FRP)
1. Context
The government on Wednesday increased the Fair and Remunerative Price (FRP), the minimum price that mills have to pay to sugarcane growers, by Rs 10 to Rs 315 per quintal for the 2023-24 season starting October
The decision to increase the FRP of sugarcane was taken in the meeting of the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi.
2. About Fair and remunerative price (FRP)
- Fair and Remunerative Price (FRP) is the minimum price at which sugar mills are legally bound to purchase sugarcane from farmers in India.
- It is determined by the Cabinet Committee on Economic Affairs (CCEA) on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
- The FRP is based on a number of factors, including the cost of production, the demand and supply situation, and the international price of sugar
- The FRP was introduced in 2009 as a way to ensure that sugarcane farmers receive a fair price for their crop.
- Prior to the FRP, sugar mills were able to negotiate prices with farmers, which often resulted in low prices for farmers.
- The FRP has helped to improve the income of sugarcane farmers and has made sugarcane cultivation a more viable option for farmers.
3.Key Statistics
- The FRP is revised annually, and the current FRP for the sugar season 2023-24 is Rs. 315 per quintal for a basic recovery rate of 10.25%
- This means that sugar mills must pay sugarcane farmers Rs. 315 per quintal for every 100 kilograms of sugarcane that they procure.
- The FRP is also adjusted for higher or lower recovery rates. For example, if the recovery rate is 10.5%, the FRP would be Rs. 321 per quintal.
- The FRP is an important policy instrument for ensuring the welfare of sugarcane farmers. It has helped to improve the income of sugarcane farmers and has made sugarcane cultivation a more viable option for farmers.
- The FRP is also a way to ensure that the sugar industry is sustainable in the long term
4. Benefits of FRP
Here are some of the benefits of the FRP:
- It ensures that sugarcane farmers receive a fair price for their crop.
- It makes sugarcane cultivation a more viable option for farmers.
- It helps to stabilize the sugar industry.
- It provides a social safety net for sugarcane farmers.
5. Way forward
The FRP is not without its challenges. One challenge is that it can lead to higher sugar prices for consumers. Another challenge is that it can make it difficult for sugar mills to be profitable. However, the FRP is an important policy instrument for ensuring the welfare of sugarcane farmers and for the sustainability of the sugar industry.
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For Prelims: Minimum Support Price (MSP), Fair and remunerative price (FRP)
For Mains: GS II - Governance, GS III - Economy
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Previous Year Questions
1.The Fair and Remunerative Price (FRP) of sugarcane is approved by the (UPSC GS1, 2015)
(a) Cabinet Committee on Economic Affairs (b) Commission for Agricultural Costs and Prices (c) Directorate of Marketing and Inspection, Ministry of Agriculture (d) Agricultural Produce Market Committee Answer (c)
The Fair and Remunerative Price (FRP) of sugarcane is approved by the Cabinet Committee on Economic Affairs (CCEA), based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). While the CACP plays a crucial role in calculating and suggesting the FRP by evaluating factors like cultivation costs, sugar recovery rate, and market conditions, the final approval is granted by the CCEA. The CCEA ensures that the FRP balances the interests of farmers and sugar mills, promoting fairness in the sugar industry |
Source: indianexpress
