July 16, 2025
Kolhapur: The Central government has clarified that sugar mills must calculate the Fair and Remunerative Price (FRP) of sugarcane based on the sugar recovery rate of the current season, not the previous one.
In a circular issued on July 10, the Ministry of Consumer Affairs addressed confusion raised by the Maharashtra State Cooperative Sugar Factories Federation, which had sought clarity on this issue earlier in July.
The sugar recovery rate refers to the amount of sugar extracted from a tonne of sugarcane. Each year, the government sets an FRP for sugarcane based on recommendations from the Commission for Agricultural Costs and Prices (CACP). The standard FRP is based on a recovery rate of 10.25%, with bonuses paid to farmers if mills extract more sugar than this rate.
Until now, many mills were calculating FRP based on the previous year’s recovery rate, rather than the actual rate achieved during the current season. That practice has now been officially ruled out.
Sanjay Khatal, managing director of the sugar federation, called it a “historic mistake” that’s now corrected. He said mills will now pay farmers a base FRP upfront, based on average recovery in their region, and any additional payments for higher recovery rates will be made at the end of the season, once actual numbers are known.
He also said mills are allowed to pay the extra amount in installments, rather than all at once.
However, sugar industry expert Vijay Autade pointed out that the new clarification could create confusion, since the actual recovery rate isn’t known until the end of the season. “It looks like farmers will get their full payment in parts, which isn’t ideal,” he said.
Farmer leader Raju Shetti criticized the move, saying the government is favoring sugar mills over farmers. “Farmers wait more than a year to harvest sugarcane and then have to wait even longer to be fully paid,” he said.
Meanwhile, sugar mills in Maharashtra still owe ₹138 crore to farmers for the 2024-25 season, which ended two months ago. Most of these unpaid dues are from 28 mills in Solapur district, according to data from the sugar commissioner’s office.
During the season, 200 sugar mills in the state crushed 854 lakh tonnes of sugarcane and paid a total of ₹24,424 crore to farmers as FRP. The sugar commissioner has already issued notices to recover the unpaid amounts.
