Government approves 17 per cent hike in sugarcane price for 2012-13

NEW DELHI: The government today approved a 17 per cent hike in sugarcane price that mills pay to farmers to Rs 170 per quintal for 2012-13.

"The Cabinet Committee on Economic Affairs (CCEA) has approved the hike in the Fair and Remunerative Price (FRP) of sugarcane to Rs 170 per quintal for 2012-13 marketing year (October-September)," sources said.

The FRP, the minimum price that sugarcane farmers are legally guaranteed, for the ongoing marketing year stands at Rs 145 per quintal.

In view of the rising production costs, the Commission for Agricultural Costs and Prices (CACP) recently recommended a 17.25 per cent increase in the FRP for the 2012-13 marketing year.

The Food Ministry accepted the CACP's recommendation and moved a Cabinet note.

The CACP is a statutory body and advises the government on the pricing policy for major farm produce.

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.

India, the world's second largest sugar producer, is currently exporting the sweetener on account of bumper production of sugarcane, which stood at 357.66 million tonnes in 2011-12.