Sugarcane is one of the most important commercial crops in India, where millions of farmers have their livelihoods connected with it and where this raw material feeds the industry. But fluctuating prices of its products, coupled with delayed payment and higher input costs, have oft affected its profitability. To ensure appropriate returns to the farmers, FRP was introduced, which assures a minimum price to the farmers for their produce independent of the market mechanism. FRP is fixed every year by the Central Government on the recommendations of the Commission for Agricultural Costs and Prices (CACP), based on input cost, demand-supply balance, and reasonable profit margins.
Besides, most of the states announce a State Advised Price (SAP) that is usually higher than the FRP to extend further support to farmers. The Sugar Development Fund and other schemes like ethanol blending programs ensure stability in the sugar sector and provide diversified streams of revenues for mills and farmers. Ensuring due payment on time by strict regulations and by using digital modes of payment has resulted in increased transparency.
Overall, fair prices, diversification through ethanol production, and supportive policy go a long way towards ensuring that sugarcane farmers throughout the country have incomes that are both decent and secure.