The Indian government has announced a Fair and Remunerative Price (FRP) of Rs 365 per quintal for sugarcane for the 2026-27 season. This decision was confirmed by Prime Minister Narendra Modi following a meeting of the Cabinet Committee on Economic Affairs on May 6. The FRP reflects the government’s ongoing commitment to enhancing the welfare of farmers across the nation.

In a communication via X, Prime Minister Modi noted that this pricing decision demonstrates the government’s focus on supporting farmers throughout India. The new pricing is expected to beneficiate millions of sugarcane growers while also enhancing the viability of sugar mills and providing employment to numerous workers within the sector.

Modi stated, “We are fully committed to the welfare of our farmer brothers and sisters, the food providers across the country.” The Prime Minister emphasised that the newly approved price aims to contribute positively to the agricultural economy, bolstering both production and farmer incomes.

Details of the Pricing Structure

The approved FRP of Rs 365 per quintal is anchored to a basic recovery rate of 10.25 per cent. There will be an additional premium of Rs 3.56 per quintal for every 0.1 per cent increase in recovery rate, while reductions will apply for lower recovery levels. For sugar mills with a recovery rate below 9.5 per cent, farmers are assured a minimum price of Rs 338.3 per quintal, ensuring protection for lower-tier producers.

This pricing decision represents a significant increase, over 100.5 per cent higher than the cost of production, and a 2.81 per cent rise compared to the previous season’s price. The government aims to guarantee timely payments and equitable returns to farmers, reflecting an overall strategy to bolster farmer livelihoods in the sugarcane sector.

The FRP will come into effect on October 1, coinciding with the start of the sugarcane procurement period for the 2026-27 season. The sugar industry supports an extensive workforce, with an estimated five crore farmers and their dependents reliant on this sector, in addition to about five lakh direct workers employed in mills.

Context of Recommendation and Payment Settlements

The decision to set the new FRP follows recommendations from the Commission for Agricultural Costs and Prices (CACP). This determination was made following a series of consultations with state governments and various stakeholders associated with the sugar industry.

The government has also highlighted improvements in cane payment resolutions. As of April 20, 2025, approximately 99.5 per cent of dues from the 2024-25 season had been disbursed, whilst around 88.6 per cent of payments for the ongoing 2025-26 season have already been settled. This reflects an enhanced commitment to ensuring farmers receive timely compensations for their produce.

This latest policy initiative underlines the Indian government’s strategic priorities in supporting agricultural sectors, especially those such as sugarcane that significantly contribute to the nation’s economy and food security. The planned implementation of this price structure aims to facilitate growth both on the production end and in the livelihood opportunities for farmers engaged in sugarcane cultivation across the country.

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