Fair and Remunerative Price (FRP)
Why in News?
The Fair and Remunerative Price (FRP) was in the news because the Announced by the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, approved an increase in the FRP of sugarcane for the 2026–27 sugar season on May 5, 2026.
How it is Determined?
- Recommendation: Based on reports from the Commission for Agricultural Costs and Prices (CACP).
- Legal Basis: Governed by the Sugarcane (Control) Order, 1966, issued under the Essential Commodities Act (ECA), 1955.
Factors Considered
- Production Cost: Includes seeds, fertilizers, and labour.
- Alternate Crops: Trends in prices of other agricultural commodities.
- Consumer Interest: Ensuring sugar remains affordable for the public.
- By-products: Revenue from molasses, bagasse, and press mud.
- Farmer Margin: Reasonable profit and risk margins for growers.
Payment Rules
- 14-Day Rule: Mills must pay farmers within 14 days of cane delivery.
- Interest: Delays can attract interest of up to 15% per annum.
- Default Penalty: Unpaid dues can be recovered by the government by attaching mill properties.
FRP vs. SAP
- FRP: The Central Government's minimum price applicable nationwide.
- SAP (State Advised Price): Some states (like UP, Punjab, Haryana) fix their own price, which is generally higher than the FRP.
- Mill Liability: Mills in these states must pay the higher SAP to farmers.
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