In addition to the Fair and Remunerative Price fixed by the central government, the minimum price for sugarcane is fixed by different state governments in India, known as the State Advised Price. Normally, SAP will be higher than FRP, aiming at giving additional financial support to the growers of sugarcane. It takes into account regional factors such as cost of cultivation, productivity levels, recovery rates, and the overall economic condition of farmers in that state.
States like Uttar Pradesh, Haryana, and Punjab announce higher SAPs to benefit the large sugarcane-growing communities. On many occasions, the higher SAPs put financial pressure on sugar mills, especially when sugar prices in the market remain low. This often delays payment to farmers, leading to disputes between mills and growers.
Despite all this, SAP remains an important policy tool to ensure a fair compensation and improvement in the livelihood of sugarcane farmers. This mirrors the responsibility of the state government in maintaining a balancing act between farmer welfare and industrial sustainability within the sugar sector.