Cabinet Approves Higher FRP of ₹355/qtl for Sugarcane for 2025-26 to Support Farmers

The newly approved FRP reflects an increase of ₹15 per quintal or 4.41% over the FRP for the sugar season 2024–25.

In a significant policy move aimed at protecting the interests of sugarcane farmers across the country, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Shri Narendra Modi, has approved the Fair and Remunerative Price (FRP) of sugarcane at ₹355 per quintal for the sugar season 2025-26 (October–September). The FRP is based on a basic recovery rate of 10.25%, with a premium of ₹3.46 per quintal for every 0.1% increase in recovery above this rate. Conversely, for lower recoveries, there will be a reduction of ₹3.46 per quintal per 0.1% decrease, ensuring a calibrated pricing mechanism that is fair to both farmers and millers.

However, in a farmer-friendly decision aimed at safeguarding those whose cane yield has lower sugar content, the Government has mandated that no deduction will apply if the recovery is below 9.5%. Instead, such farmers will still be entitled to ₹329.05 per quintal, thus ensuring a minimum assured price irrespective of recovery losses.

A Substantial Increase Over Previous Season

The newly approved FRP reflects an increase of ₹15 per quintal or 4.41% over the FRP for the sugar season 2024–25. This decision translates into a substantial return of 105.2% over the A2+FL cost of production, which is ₹173 per quintal for 2025–26. This surplus over cost aligns with the Government’s commitment to ensuring 50% profit margin over production costs, as envisioned under the recommendations of the Swaminathan Commission.

Empowering Over 5 Crore Sugarcane Farmers

India's sugar sector is not only an agro-economic pillar but also a critical component of rural livelihoods. It supports:

• Approximately 5 crore sugarcane farmers and their families

• Over 5 lakh workers employed directly in around 500 sugar mills

• Numerous others involved in farm labour, transport, supply chains, and ancillary services

The FRP acts as a legal minimum price and is binding on all sugar mills, unlike the State Advised Prices (SAPs) announced by individual state governments, which are often higher and optional. This statutory backing ensures that sugarcane growers receive a guaranteed price for their produce.

Boost to Rural Economy and Allied Sectors

The sugar industry plays a critical role in India’s bio-energy, ethanol blending, and rural employment ecosystems. The revision in FRP will enhance farm incomes, encourage timely cane payments by sugar mills, and facilitate sustainable supply chains. Furthermore, it is likely to aid in maintaining a stable supply of feedstock for ethanol production, which is central to India’s goals for reducing crude oil imports and carbon emissions under the Ethanol Blended Petrol (EBP) Programme.

Path Forward: Balancing Farmers' Welfare and Industry Viability

While ensuring fair compensation to farmers, the Government has also kept in mind the viability of the sugar industry, which is often strained by delayed payments and working capital constraints. The pricing formula adopted this year provides a balanced approach, ensuring sustainability of both ends of the supply chain.

The FRP policy continues to serve as a key agricultural pricing instrument that guarantees predictable returns to farmers, encourages production, and maintains equilibrium in the sector.

With the sugarcane harvest set to begin in October 2025, stakeholders across the sugar value chain will now prepare for the upcoming season with greater clarity and confidence.