Sugarcane FRP Fair Remunerative Price Photo: Dr Photographer · Pexels License · source ↗

Sugarcane FRP (Fair and Remunerative Price)

The Fair and Remunerative Price (FRP) is the central government's mandatory minimum price that sugar mills must pay to cane farmers for every tonne of sugarcane purchased, regardless of mill profitability or market conditions. Introduced in 2009-10 sugar season replacing the earlier Statutory Minimum Price (SMP), FRP is announced annually by the Cabinet Committee on Economic Affairs (CCEA) on recommendation of the Commission for Agricultural Costs and Prices (CACP). Unlike MSP for other crops, FRP is statutorily enforceable — non-payment within 14 days of cane delivery attracts interest at 15% per annum under the Sugarcane (Control) Order, 1966.

Overview and launch

FRP replaces the older SMP framework and is governed by Clause 3 of the Sugarcane (Control) Order, 1966, as amended. The 2024-25 sugar season FRP was set at Rs 340 per quintal linked to a basic recovery rate of 10.25%, with a premium of Rs 3.32 per quintal for every additional 0.1 percentage point of recovery above 10.25%, and a symmetric deduction for recoveries below 10.25% subject to a floor.

Eligibility

FRP applies to all sugarcane purchased by sugar mills in scheduled mill zones from cane growers who have entered into a cane purchase agreement with the mill or are assigned a survey/satta/calendar by the cane commissioner. State-allocated mill zones are notified annually. Khandsari, gur (jaggery) and direct-sale-to-consumer cane do not fall under FRP.

Benefit and structure

Floor price: Rs 340 per quintal at 10.25% recovery (2024-25 sugar season)
Premium: +Rs 3.32 per quintal for every 0.1 percentage point recovery above 10.25%
Deduction: -Rs 3.32 per quintal for every 0.1 point below 10.25%, subject to a notified floor (Rs 315.10/q for 2024-25 at 9.5% recovery)
Sugar-mill price for cane at 11.5% recovery (typical Co 0238 mill, see co-0238-karan-4-sugarcane): Rs 340 + 12.5 x Rs 3.32 = approximately Rs 381.50/q
Payment timeline: within 14 days of cane delivery under the Sugarcane (Control) Order
Interest on delayed payment: 15% per annum, payable to farmer until cleared

Implementation

CACP recommends FRP each sugar season (October-September) after stakeholder consultations
CCEA approves the price
Department of Food and Public Distribution notifies the FRP through the Sugarcane (Control) Order
Cane Commissioners of cane-producing states (UP, Maharashtra, Karnataka, TN, AP, Bihar, Punjab, Haryana) enforce mill compliance through cane payment monitoring portals
State governments may impose State Advised Price (SAP) over and above FRP (see sugarcane-sap-state-advised-price) — UP, Punjab and Haryana have run higher SAP regimes for political reasons
Recovery is measured at the mill weighbridge and laboratory under the calibrated Commercial Cane Sugar (CCS) percentage protocol (see sugarcane-recovery-percentage-ccs)

Why FRP is unique

Unlike paddy or wheat MSP — which is operative only if government procurement steps in — FRP creates a direct private-mill obligation to farmer at every cane delivery. This is the only crop pricing in India where a private buyer is statutorily bound to pay a government-fixed floor on every transaction. The trade-off: sugar mills experiencing low ex-mill sugar prices and ethanol uplift insufficient to cover FRP regularly accumulate cane arrears in the tens of thousands of crores, which then become a political flash-point in UP and Maharashtra.

Sources

Fair and Remunerative Price for sugarcane. Press Information Bureau, Government of India.
Sugarcane price recommendations. Commission for Agricultural Costs and Prices.
Sugarcane (Control) Order 1966. Department of Food and Public Distribution.