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Center’s Landmark Move Amid Famers Protest: Eight Percent Hike in Sugarcane FRP/Quintal

@newsonair - PIB_India

News: Prime Minister Modi Announces Historic Increase in Sugarcane Price Amid Farmers’ Protests.

About the news:

• In a significant development for the agricultural sector, Prime Minister has reiterated the government’s unwavering commitment to the welfare of farmers across the country;
• The announcement comes in the wake of ongoing farmers’ protests, with demands for a Minimum Support Price (MSP) for all crops echoing throughout the nation;
• PM took to social media to share the news, specifically highlighting the Union Cabinet’s recent decision to increase the Fair and Remunerative Price (FRP) for sugarcane. In a post, he stated that a historic surge in the purchase price of sugarcane had been approved, a move poised to benefit millions of sugarcane-producing farmers nationwide;
• Reason for such Move by Government:
  • The reason behind the PM emphatic remark can be traced back to the persisting farmers’ protests, where the primary demand revolves around securing a Minimum Support Price for all crops;
  • The farmers’ discontent has been a longstanding issue, prompting the government to address their concerns and take steps towards ensuring their well-being.

Fair and Remunerative Price (FRP) for sugarcane

• The Cabinet Committee on Economic Affairs, in a session held yesterday, gave the green light to the revised FRP for the upcoming Sugar Season 2024-25;
• The approved FRP stands at 340 rupees per quintal, considering a sugar recovery rate of 10.25 percent;
• This marks a historic increase of about 8 percent compared to the FRP for the current season (2023-24). The revised FRP is slated to be applicable starting from the 1st of October this year.

Impact of Such Decisions

• The decision to boost the price of sugarcane is expected to have a far-reaching impact, particularly on the livelihoods of millions of sugarcane-producing farmers;
• The move not only addresses their immediate financial concerns but also underscores the government’s commitment to the overall welfare of the agricultural community;
• It can be considered as a significant step towards pacifying the grievances of farmers amid ongoing protests and also the government’s responsiveness to the demands of the agricultural community, as evidenced by the increased FRP, reflects a concerted effort to ensure the well-being and prosperity of the backbone of our nation – the farmers.

Various Terms Explanation

Fair and Remunerative Price (FRP)

• Definition: The Fair and Remunerative Price (FRP) is the minimum amount at which sugar mills are obligated to procure sugarcane from farmers;
• Determining Authority: The responsibility of fixing the FRP rests with the Union government, specifically the Cabinet Committee on Economic Affairs (CCEA). The decision is made based on the recommendations put forth by the Commission for Agricultural Costs and Prices (CACP);
• Regulations: The determination of the ‘FRP’ for sugarcane falls under the purview of the Sugarcane (Control) Order, 1966;
• Calculation Method: The recommended FRP is established by considering various factors, including the cost of production, the demand-supply scenario, domestic and international prices, and inter-crop price parity;
• Advantages: The FRP serves as a guarantee for farmers, ensuring them a margin regardless of whether sugar mills are profitable or not. This policy is uniformly applicable across the entire country. In addition to the FRP, certain states such as Punjab, Haryana, Uttarakhand, Uttar Pradesh, and Tamil Nadu introduce a State Advised Price, typically set higher than the FRP.

Minimum Support Price (MSP):

• Historical Background:
  • The roots of the Minimum Support Price (MSP) regime in India trace back to the establishment of the Food-Grain Enquiry Committee in 1957 during the Nehru administration;
  • Unfortunately, it proved to be inconsequential in addressing agricultural earnings and hence in 1964, recognizing the need for intervention, Prime Minister Lal Bahadur Shastri formed the Food Grain Price Committee under LK Jha to advocate for an MSP regime;
  • Despite swift acceptance of the committee’s report, the first MSP announcement was made in 1967, marking the inception of the MSP regime;
  • The government subsequently established the Agricultural Prices Commission, later renamed the Commission for Agricultural Costs and Prices (CACP) in 1985, to oversee MSP fixation.
• About MSP:
  • MSP serves as a form of market intervention, implemented by the government to shield agricultural producers from drastic price fluctuations during abundant production years;
  • The Cabinet Committee on Economic Affairs, chaired by the Prime Minister of India, announces MSPs based on recommendations from the CACP at the commencement of the sowing season for specific crops;
  • The CACP considers various factors, including demand and supply, production costs, market trends (both domestic and international), inter-crop price parity, terms of trade, ensuring a minimum 50% margin over the cost of production, and assessing the potential impact on consumers.
• Objectives:
  • The primary objectives of MSPs are to guarantee a minimum price for farmers’ produce, preventing distress sales and facilitating the procurement of food grains for public distribution;
  • In scenarios where market prices fall below the specified minimum due to surplus production, government agencies commit to purchasing the entire quantity from farmers at the announced minimum price.
• Crops Covered: The government announces MSPs for 22 mandated crops, along with a fair and remunerative price (FRP) for sugarcane, bringing the total to 23.
  • Seven types of cereals (paddy, wheat, maize, bajra, jowar, ragi, and barley);
  • Five types of pulses (chana, arhar/tur, urad, moong, and masur);
  • Seven oilseeds (rapeseed-mustard, groundnut, soybean, sunflower, sesamum, safflower, nigerseed), and;
  • Four commercial crops (cotton, sugarcane, copra, raw jute).

Source: Newsonair

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