February 28, 2025 – In a significant move aimed at uplifting the agricultural community, the government has announced a hike in the Fair and Remunerative Price (FRP) of sugarcane for the upcoming 2025-26 sugar season, effective from October 1, 2025. The FRP, which serves as the minimum price that sugar mills must pay sugarcane farmers, has been increased by 8%, raising it from ₹340 per quintal to ₹367 per quintal at a sugar recovery rate of 10.25%. This decision, finalized in a late-night cabinet meeting on February 27, 2025, is poised to bring relief and prosperity to millions of sugarcane farmers across the country.
The announcement comes as a response to the growing demands from farmers and agricultural associations, particularly in key sugarcane-producing states like Uttar Pradesh, Maharashtra, and Karnataka. These regions account for a substantial portion of India’s sugarcane output, with Uttar Pradesh alone contributing nearly 40% of the national production. The hike in FRP is expected to benefit over 5 crore sugarcane farmers and their families, alongside thousands of workers employed in the sugar industry. This move underscores the government’s commitment to ensuring fair compensation for farmers while maintaining stability in the domestic sugar market.
Under the revised pricing structure, the FRP will increase by ₹3.58 for every 0.1% rise in sugar recovery above the baseline of 10.25%. Conversely, for every 0.1% decrease below this threshold, the price will be reduced by the same amount. However, a minimum assured price of ₹340 per quintal has been set for sugarcane with a recovery rate of 9.5%, ensuring that farmers are safeguarded even if recovery rates dip. This mechanism aims to strike a balance between incentivizing higher productivity and protecting farmers from market fluctuations.
The decision follows a similar hike in February 2024, when the FRP was raised from ₹315 to ₹340 per quintal, marking an 8% increase at that time. The latest adjustment reflects the rising costs of production faced by farmers, including labor, fertilizers, and irrigation expenses. In states like Karnataka, where the cost of producing sugarcane has reportedly climbed to ₹358 per quintal, farmers have long argued that the previous FRP fell short of covering their expenses. The new rate of ₹367 per quintal is seen as a step toward addressing these concerns, although some farmer groups continue to demand a higher price closer to ₹400 per quintal.
The sugar industry, while welcoming the focus on farmers’ welfare, has raised concerns about its financial implications. Sugar mills, which have not received a corresponding increase in the Minimum Support Price (MSP) for sugar since 2018-19, claim that the rising FRP could strain their profitability. The MSP for sugar remains stagnant at ₹31 per kilogram, despite escalating production costs and inflation. Industry representatives have called for a synchronized hike in sugar MSP to ensure mills can clear dues to farmers promptly. As of the end of the 2023-24 crushing season, mills in Uttar Pradesh alone paid over ₹30,000 crore to farmers, covering more than 95% of the total dues—a feat made possible by government interventions but one that remains challenging without MSP adjustments.
This FRP hike also comes amid broader discussions on agricultural reforms, with farmers across the country advocating for guaranteed minimum prices for all crops. The sugarcane sector stands out as a rare example where the government announces the FRP well in advance, providing farmers with predictability and security. This contrasts with other crops, where procurement mechanisms are less systematic, prompting some farmers to shift toward sugarcane cultivation in recent years. In Karnataka, for instance, the crop’s assured returns—estimated at ₹20,000 to ₹40,000 per acre—have made it an attractive option compared to other agricultural ventures.
Looking ahead, the success of this price increase will depend on several factors, including the upcoming monsoon season, which plays a critical role in sugarcane yields. A robust crop could amplify the benefits of the FRP hike, while any shortfall might reignite debates over pricing and support. For now, the government’s decision has been hailed as a farmer-friendly move, particularly in politically significant states ahead of upcoming elections. As the sugar season approaches, all eyes will be on how this policy translates into tangible gains for India’s sugarcane growers and the broader rural economy.
