Fair and Remunerative Price (FRP)

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Fair and Remunerative Price (FRP) : is the existing arrangement for the price to be paid to sugarcane farmers by the Sugar Mills and is is announced each year by the Centre, under the Sugarcane Control Order and on the advice of Commission for Agricultural Costs and Prices (CACP)as the minimum price of sugarcane. However, many states in north India also announce a State Advised Price (SAP) under state legislation. Generally, the SAP is substantially higher than the FRP, and therefore wherever SAP is declared, it is the ruling price. Mill owners are obligated to pay SAP to farmers.

This system suffers from problems of accumulation of arrears of cane dues in years of high price and low price for farmers in other years and hence C. Rangarajan committee set up in Oct 12 has recommended doing away with this and introducing a profit sharing mechanism.

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