The Commission for Agricultural Costs and Prices works out the Fair and Remunerative Price of sugarcane that should be given to farmers. FRP is the minimum price payable by sugar mills to farmers for their produce, offering a fair compensation to ensure economic viability of the cultivators. The CACP is an advisory body under the Ministry of Agriculture and Farmers Welfare, which conducts detailed analysis prior to recommending FRP to the government.
The CACP, in its estimation, considers cost of production, return on investment, domestic and international sugar prices, sugar recovery rate, and the overall demand-supply situation. It also takes into consideration the reasonable margins for farmers over their costs and the financial health of the sugar mills with a view to balancing the welfare of farmers with the viability of the industry.
Based on the above parameters, CACP recommends FRP for each sugar season to the Cabinet Committee of Economic Affairs (CCEA), which then approves and declares FRP. Through this fair and transparent mechanism, the CACP seeks to ensure remunerative returns to sugarcane farmers in addition to promoting stability and growth in the sugar sector.