The government has approved 17 per cent hike in sugarcane price
- that mills pay to farmers - to Rs 170 per quintal for 2012-13.
The minimum price that sugarcane farmers are legally guaranteed (Fair and Remunerative Price) for the ongoing marketing year stands at Rs 145 per quintal at present.
"The Cabinet Committee on Economic Affairs (CCEA) has approved the Fair and Remunerative Price (FRP) of sugarcane payable by sugar mills for 2012-13 to be fixed at Rs 170 per quintal," an official release said.
The CCEA, which met on Thursday, accepted the recommendations
of the Commission for Agricultural Costs and Prices (CACP), which suggested 17.25 per cent increase in the FRP for the 2012-13 marketing year, keeping in view the rising production costs.
The CACP is a statutory body and advises the government on the pricing policy for major farm produce.
FRP is the sugarcane price fixed by the Centre but there are some states like Uttar Pradesh and Tamil Nadu that announce their own rate - called state advisory price (SAP).
SAP is higher than FRP.
In Uttar Pradesh, for example, SAP for the current year stands at Rs 250 per quintal, compared to Centre's FRP of Rs 145 a quintal.
Usually, the government accepts the cane price recommended by the CACP.
India, the world's second largest sugar producer, is currently exporting the sweetener
on account of bumper production of sugarcane, which stood at 357.66 million tonnes in 2011-12.With inputs from PTI