Fair and Remunerative Price

Recently, Maharashtra Government issued a government resolution which will allow sugar mills to pay the basic Fair and Remunerative Price (FRP) in two tranches.

About FRP: FRP is the price declared by the government, which mills are legally bound to pay to farmers for the cane procured from them.

• It was introduced in 2009 and replaced the concept of Statutory Minimum Price (SMP).
• The Central Government announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and announced by the Cabinet Committee on Economic Affairs (CCEA).

Impacts/Significance: Under the FRP system, the price paid to farmers for sugarcane is not linked to the profits generated by sugar mills. Instead, FRP is based on the recovery rate of sugar from sugarcane.