By Saurabh Katkurwar
New Delhi, July 18 (IANS) The government's decision on Wednesday to increase the Fair and Remunerative Price (FRP) for sugarcane for 2018-19 (October-September) season by Rs 20 to Rs 275 for a quintal comes with a rider that the new rate will be applicable only when the recovery rate is 10 per cent.
The recovery rate -- of sugar from sugarcane -- was 9.5 per cent when the government had fixed the FRP of Rs 255 for a quintal in 2017-18.
If the recovery rate of 9.5 per cent is considered for 2018-19, the farmers will get only Rs 261.25, which is a hike of roughly Rs 6.25, on year-on-year basis.
According to Union Food Minister Ram Vilas Paswan, 295 mills of the total 550-odd mills in the country have reported recovery rate of over 10 per cent.
"Earlier, the recovery rate was 9.5 per cent. But it is increasing now. There are 295 mills which have reported over 10 per cent recovery rate, 82 have between 9.5 and 10 per cent, while there are only 127 mills that have below 10 per cent recovery rate. As the majority is of 10 per cent, we have gone with it (while fixing the FRP)," Paswan told reporters here.
The average national recovery rate is 10.51 per cent, while it is 10.20 per cent and 11.47 per cent in major sugar producing states of Uttar Pradesh and Maharashtra, respectively, he said.
However, agriculture activists called the hike in the FRP "shameful", saying the actual hike would be below 3 per cent.
"It's like peanuts. It is not even 3 per cent since expenses on electricity, labour and fertlizer have gone up significantly. The hike should have been done rationally," said V.M. Singh, president of Rashtriya Kisan Majdoor Party.
He said the remuneration at 10 per cent recovery rate in 2017-18 was Rs 268, which means the actual hike is only of Rs 7 this year.
There are about five crore sugarcane farmers in the country and about five lakh workers are directly employed in sugar mills.
The total remittance to sugarcane farmers by the millers would be over Rs 83,000 crore.
The government has approved a premium of Rs 2.75 per quintal for each 0.1 per cent increase in the recovery over and above 10 per cent.
According to the government, the production cost of sugarcane for 2018-19 is pegged at Rs 155 per quintal, so the FRP of Rs 275 per quintal would provide a return of 77.42 per cent.
The FRP is determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
Paswan said there will not be any reduction in case recovery rate goes below 9.5 per cent and farmers will get Rs 261.25 per quintal.
As per the Food Ministry's figures, the cane arrears, which stood at Rs 14,538 crore at FRP (Rs 23,232 crore at state advisory price - SAP) on May 21, has come down to Rs 9,319 crore (Rs 17,824 at SAP) following the various steps taken by the government in May including the Rs 7,000-crore package.
"Our top priority is farmers. To ensure that millers can pay farmers their dues, we give them such facilities," Paswan said.
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