The government of India has increased sugarcane price by a whopping 17 percent. That is to say, sugar mills would pay to farmers Rs 170 a quintal for 2012-13.
The Commission for Agricultural Costs and Prices had earlier recommended an increase in sugarcane price.
Sources say what with increasing production costs and a general weakening of the rural economy, the sugarcane farmers deserved a better deal.
The FRP, the minimum price that sugarcane farmers are legally guaranteed, for the ongoing marketing year stands at Rs 145 per quintal.
The FRP is the sugarcane price fixed by the Centre but there are some states like Uttar Pradesh and Tamil Nadu which announce their own rate called state advisory price (SAP).
The SAP is higher than the FRP. In Uttar Pradesh, for example, the SAP for the current year stands at Rs 250 per quintal, compared to Centre’s FRP of Rs 145 a quintal.
Usually, the government accepts the cane price recommended by the CACP.
Sources add India has had a bumper sugarcane production in 2011-12 and has emerged as one of the leading sugar exporting countries on the global market. There is general agreement that India’s capacity to supply the world with sweetener has continuously been on an upward trend.