In a decisive move to bolster the agricultural sector, the Union Government has increased the Fair and Remunerative Price (FRP) of sugarcane by 4.41%, setting it at ₹355 per quintal for the 2025–26 crushing season. This adjustment, approved by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, aims to enhance farmer incomes amid rising production costs and inflationary pressures.
Understanding FRP: Ensuring Fair Compensation
The FRP is the minimum price that sugar mills are legally obligated to pay sugarcane farmers for their produce. Unlike the Minimum Support Price (MSP) for other crops, the FRP is enforceable by law, providing a safety net for farmers against market volatility. For the 2025–26 season, the FRP is based on a basic recovery rate of 10.25%. Farmers will receive an additional ₹3.46 per quintal for every 0.1% increase in sugar recovery above this rate, and a corresponding reduction for lower recoveries. However, to protect farmers with lower recovery rates, the government has stipulated that no deductions will be made if the recovery falls below 9.5%, guaranteeing a minimum payment of ₹329.05 per quintal.
Economic Impact: Strengthening Rural Livelihoods
With approximately 50 million farmers engaged in sugarcane cultivation and around 500,000 workers employed in sugar mills, this FRP hike is poised to have a substantial impact on rural livelihoods. The cost of sugarcane production for the 2025–26 season is estimated at ₹173 per quintal. Thus, the new FRP represents a 105.2% increase over the production cost, reinforcing the government's commitment to farmer welfare.
Strategic Timing Amidst Declining Sugar Production
The FRP increase comes at a time when India's sugar production is projected to decline. According to the Indian Sugar and Bio-Energy Manufacturers Association, sugar production is estimated at 264 lakh metric tonnes for the 2025–26 season, down from 319 lakh metric tonnes in the previous year. This proactive measure aims to incentivize farmers to maintain or increase sugarcane cultivation, ensuring stability in sugar supply and supporting the ethanol blending program.
Complementary Infrastructure Development
In addition to the FRP hike, the government has approved a ₹22,864 crore greenfield expressway project connecting Meghalaya and Assam. This infrastructure initiative is expected to enhance market access for farmers in the Northeast, facilitating the transportation of agricultural produce and contributing to the overall rural economy.
A Step Towards Sustainable Agricultural Growth
The increase in sugarcane FRP to ₹355 per quintal for the 2025–26 season reflects the government's strategic approach to supporting farmers and stimulating the rural economy. By ensuring fair compensation for sugarcane producers and investing in infrastructure, these measures aim to address current challenges in the agricultural sector and promote sustainable growth.