Daijiworld Media Network - New Delhi

New Delhi, May 5: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Tuesday approved a 2.81 percent increase in the fair and remunerative price (FRP) of sugarcane to Rs 365 per quintal for the 2026–27 sugar season.

The revised FRP is applicable for a basic recovery rate of 10.25 percent. For every 0.1 percent increase in sugar recovery above this level, farmers will receive a premium of Rs 3.56 per quintal. Conversely, the price will be reduced by the same amount for every 0.1 percent drop in recovery.

To safeguard farmers’ interests, the government has ensured that there will be no deduction for mills with recovery rates below 9.5 percent. In such cases, farmers will still receive Rs 338.3 per quintal for their produce.

The FRP has been set based on recommendations from the Commission for Agricultural Costs and Prices after consultations with state governments and stakeholders. Officials noted that the new FRP is significantly higher than the estimated production cost (A2+FL) of Rs 182 per quintal—offering a margin of over 100 percent to farmers.

The revised price will come into effect from October 1, 2026, marking the start of the new sugar season.

The sugar sector plays a vital role in India’s rural economy, supporting nearly 5 crore sugarcane farmers and their families, along with around 5 lakh workers employed directly in mills and many more in related activities such as transportation and farm labour.

Government data also shows steady progress in clearing farmers’ dues. In the 2024–25 season, about 99.5 percent of dues were paid, while in the ongoing 2025–26 season, nearly 88.6 percent of payments have been cleared as of April 20.