The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved an increase in the fair and remunerative price (FRP) of sugarcane to Rs 355 per quintal for a basic recovery rate of 10.25 percent for the 2025-26 sugar season (October-September) while keeping farmers' interests in mind, according to a cabinet communique.

The FRP for the sugar season 2025-26 is 4.41% higher than the current sugar season 2024-25.

It also includes a premium of Rs 3.46 per quintal for every 0.1 percent increase in recovery above 10.25 percent, as well as a Rs 3.46 per quintal reduction in FRP for every 0.1 percent decrease in recovery.

However, in order to protect the interests of sugarcane farmers, the government has decided that there will be no deduction for sugar mills with a recovery rate of less than 9.5%. According to the statement, such farmers will receive Rs 329.05 per quintal (qtl) of sugarcane in the upcoming sugar season 2025-26.

The cost of producing sugarcane (A2+FL) for the sugar season 2025-26 is Rs173/qtl. This FRP of Rs 355/qtl, with a recovery rate of 10.25 percent, is 105.2 percent higher than the production cost.

The approved FRP will be applicable to mills' purchases of sugarcane from farmers during the sugar season 2025-26, beginning October 1, 2025.

The sugar industry is a significant agro-based sector that affects the livelihoods of approximately 5 crore sugarcane farmers and their dependents, as well as approximately 5 lakh workers directly employed in sugar mills, in addition to those employed in various ancillary activities such as farm labor and transportation.

The FRP was determined based on the Commission for Agricultural Costs and Prices' (CACP) recommendations and after consultation with state governments and stakeholders.

As of April 28 this year, approximately Rs 1,11,703 crore of cane dues payable for the previous sugar season 2023-24 had been paid to farmers, resulting in a 99.92 percent clearance of cane dues.

As of April 28, approximately Rs 85,094 crore had been paid to farmers in the current sugar season for 2024-25, accounting for 87% of the cane dues.