Sweet Support
- Correspondent
- 7 hours ago
- 2 min read
The Union Cabinet’s decision to raise the Fair and Remunerative Price (FRP) for sugarcane for the 2026–27 season to Rs. 365 per quintal, based on a 10.25 percent recovery rate, represents a deliberate strengthening of rural incomes and sectoral stability
Aimed at benefiting nearly five crore farmers, it will be a major bounty for farmers in Maharashtra’s sugar-rich western belt. The increase of 2.81 percent over the previous season ensures that cane remains one of the few crops in India offering assured and remunerative returns. With the FRP now more than double the estimated cost of production, farmers are now guaranteed a margin that shields them from market volatility. The provision of Rs. 338.3 per quintal for areas with recovery below 9.5 percent further insulates growers from adverse agro-climatic conditions, underscoring the policy’s redistributive intent.
The FRP is a mechanism and its linkage to sugar recovery rates introduces a degree of economic rationality often absent in agricultural policy. By rewarding higher efficiency while protecting weaker regions, the system aligns incentives across the value chain. The recent insistence, following a Bombay High Court ruling, that mills must pay the FRP in a single instalment rather than staggered payments strengthens this architecture further.
Nowhere does this matter more than in Maharashtra. The western belt of Kolhapur, Sangli, Satara and Pune forms the nerve centre of India’s sugar economy, where cooperative mills double as political institutions. The history of FRP itself is inseparable from agitation and negotiation. Before the FRP regime was formalised, disputes over cane pricing often erupted into protests led by powerful farmer outfits. Leaders such as Raju Shetti built their political careers mobilising cane growers demanding higher procurement prices and timely payments. The shift towards a centrally declared FRP, backed by the recommendations of the Commission for Agricultural Costs and Prices, was in part an attempt to institutionalise these demands and reduce the volatility of annual confrontations.
Even so, echoes of that turbulent past remain. Payment discipline continues to be the sector’s weak link. Despite a statutory requirement that mills clear dues within 14 days, delays are not uncommon. In Maharashtra, around Rs. 1,012 crore in FRP payments remains pending, with total arrears exceeding Rs. 4,200 crore in early 2026. Yet, compared to the protracted standoffs of earlier decades, the system today is markedly more responsive.
Higher FRP translates into improved liquidity for farmers and stronger rural demand. With industry estimates suggesting an additional Rs. 15,000–20,000 crore flowing into the countryside, the multiplier effects will extend well beyond agriculture. In Maharashtra’s cooperative ecosystem, this means greater financial stability for mills, more reliable wage flows for labourers, and renewed confidence in the rural economy.
The policy also dovetails neatly with India’s ethanol ambitions. By sustaining cane production, it ensures a steady feedstock for ethanol blending, offering mills an alternative revenue stream and reducing dependence on volatile sugar prices.



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