The Cabinet Committee on Economic Affairs (CCEA) has approved an increase of ₹15 per quintal in the Fair and Remunerative Price (FRP) of sugarcane, raising it to ₹355 per quintal for the upcoming sugar season starting in October 2025. The current FRP for the 2024-25 season is ₹340 per quintal.
Sugar mills are legally required to buy sugarcane from farmers at the FRP, unless a state has set its own, usually higher, State Advised Price (SAP), which is also mandatory. The sugar industry is highly regulated by both the central and state governments. They control various aspects, including where factories can be set up, designated areas for sugarcane purchase, minimum cane prices, sugar selling prices, monthly sales quotas, export permissions, and ethanol supply to oil companies.
Speaking to the media after the CCEA meeting, Information and Broadcasting Minister Ashwini Vaishnaw said that the new FRP of ₹355 is based on a basic sugar recovery rate of 10.25%. This is a 4.41% increase over the FRP for the 2024-25 season.
Premiums and Deductions Based on Sugar Recovery
If the sugar recovery rate exceeds 10.25%, sugar mills will pay a premium of ₹3.46 for every 0.1% increase. Conversely, if the recovery rate falls below 10.25%, ₹3.46 will be deducted per 0.1% decrease. For sugarcane with a recovery rate of 9.5% or less, a fixed price of ₹329.05 per quintal will apply.
The recovery rate indicates how much sugar is extracted from the sugarcane. At the base FRP, farmers should receive payment equivalent to 10.25 kg of sugar for every quintal (100 kg) of cane crushed. Also Read | Sugarcane cutter women demand separate identity cards for govt scheme.
Profit Margins and Farmer Benefits
The government estimates that the all-India average cost of production (A2+FL) for sugarcane in the 2025-26 season is ₹173 per quintal. This means that farmers will earn more than double their production cost.
Sugarcane farming supports the livelihoods of nearly 5 crore (50 million) farmers and their families. Additionally, about 5 lakh (500,000) workers are directly employed in sugar mills, with many more involved in related sectors such as farm labor and transportation.
Cane Dues and Payments
The new FRP was decided based on recommendations from the Commission for Agricultural Costs and Prices (CACP) and after consultations with state governments and other stakeholders.
As of April 28, sugar mills have paid ₹85,094 crore—around 87% of the total ₹97,270 crore due to farmers for the 2024-25 season. In the 2023-24 season, mills paid ₹1,11,703 crore out of the total ₹1,11,782 crore owed.
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