The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday approved an increase in the fair and remunerative price (FRP) of sugarcane to Rs 355 per quintal for a basic recovery rate of 10.25 per cent for the 2025-26 sugar season (October-September) keeping the interest of farmers in mind, according to a cabinet communique.

The FRP for the sugar season 2025-26 is 4.41 per cent higher than the current sugar season 2024-25.

It also provides for a premium of Rs 3.46 per quintal for each 0.1 per cent increase in recovery over and above 10.25 per cent, and reduction in FRP by Rs 3.46 a quintal for every 0.1 per cent decrease in recovery.

However, the government, with a view to protect the interest of sugarcane farmers, has also decided that there will not be any deduction in case of sugar mills where recovery is below 9.5 per cent. Such farmers will get Rs 329.05 per quintal (qtl) for sugarcane in the ensuing sugar season 2025-26, the statement explained.

The cost of production (A2+FL) of sugarcane for the sugar season 2025-26 is Rs173/qtl. This FRP of Rs 355/qtl at a recovery rate of 10.25 per cent is higher by 105.2 per cent over production cost.

The FRP approved shall be applicable for purchase of sugarcane by mills from the farmers in the sugar season 2025-26 starting with effect from October 1, 2025.

The sugar sector is an important agro-based sector that impacts the livelihood of about 5 crore sugarcane farmers and their dependents and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities including farm labour and transportation.

The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultation with state governments and other stake-holders.

In the previous sugar season 2023-24, out of cane dues payable of Rs 1,11,782 crore, about Rs 1,11,703 crore of cane dues have been paid to farmers, as on April 28 this year, which means that 99.92 per cent cane dues have been cleared.

In the current sugar season for 2024-25, out of the cane dues payable of Rs 97,270 crore, about Rs 85,094 crores have been paid to farmers, as on April 28, which amounts to 87 per cent of the cane dues being cleared.