The Union Cabinet today considered a proposal to increase the minimum price that sugar mills are required to pay to cane growers by Rs 20 per quintal for the next marketing year starting October, according to sources.
The government recently announced a sharp increase in the minimum support price (MSP) of kharif (summer-sown) crops including paddy. The Commission for Agricultural Costs and Prices (CACP) had recommended Rs 20 per quintal hike in the FRP of sugarcane.
The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season.
For the upcoming season sugar mills have to pay the farmers Rs275 per quintal.
The CACP is a statutory body that advises the government on the pricing policy for major farm produce. Usually, the government accepts the CACP recommendations.
At present, the FRP price is linked to a basic recovery rate of 9.5 per cent, subject to a premium of Rs 2.68 per quintal for every 0.1 per cent point increase in recovery rate.