The government has approved increase in the fair and remunerative price, FRP, for sugarcane by 10 rupees per quintal for 2014-15. The FRP for sugarcane for the current sugar year stands at 210 rupees per quintal. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs in New Delhi this evening.

The proposal is based on the recommendations of the Commission for Agricultural Costs and Prices which advises the government on pricing policy for major farm produce.

The FRP is the minimum price that sugarcane farmers are legally guaranteed. However, state governments are free to fix their own price and millers can offer any price above the FRP. It is fixed after taking into consideration the margins for sugarcane farmers on the basis of production cost of sugarcane, including transportation.

Government has pegged sugar output at 24.1 million tonnes for this year, lower than 25 million tonnes achieved last year.