FRP vs. MSP: Sugarcane Price Mechanisms Explained

Key Points

• 1The Centre announced a hike in the Fair and Remunerative Price (FRP) of sugarcane to Rs 340 per quintal for the 2024-25 sugar season.
• 2FRP is the price sugar mills must legally pay to sugarcane farmers, as decided by the CCEA.
• 3The FRP is based on the recovery of sugar from the cane; for 2024-25, FRP is Rs 340/quintal at a recovery of 10.25%.
• 4MSP is the Minimum Support Price, provided by the government for 23 crops, which serves as a guaranteed payment.
• 5Sugarcane has both FRP and MSP due to its short shelf life, which necessitates mandatory upfront payment from mills.
• 6The government introduced MSP for sugar in 2018, at Rs 2,850 per quintal, subsequently raised to Rs 3,100 per quintal.