Fair and Remunerative Price (FRP) is the minimum price that is determined by the Government of India for sugarcane, thereby giving fair returns to the farmers for their crops. Effective from the Sugarcane (Control) Order, 1966, the FRP system was implemented in place of the previous Statutory Minimum Price (SMP) during 2009–10, making the pricing of sugarcane more transparent and equitable.
FRP is fixed every year by the Central Government following the advice of the Commission for Agricultural Costs and Prices (CACP). Various aspects are taken into account while computing it, such as the production cost, demand-supply situation, recovery rate, domestic and export prices of sugar, and an adequate margin for farmers’ earnings. It makes sure that farmers get a minimum price irrespective of the volatility in the sugar market.
In contrast to the previous system, FRP renders payment to farmers obligatory within 14 days of delivery of sugarcane, safeguarding them against delayed payment by the mills. It also supports the vision of the government towards providing “remunerative returns to farmers” and achieving sustainable agriculture.
In total, FRP serves to strike a balance between the economic interests of sugar cane producers and sugar mills, adding substantially to rural livelihoods and India’s sugar industry.