| Features |
MSP (Minimum Support Price) |
FRP (Fair and Remunerative Price) |
| Who determines it? |
- Fixed by: Union government (Cabinet Committee on Economic Affairs (CCEA)).
- Recommended by: Commission for Agricultural Costs and Prices (CACP).
|
- Fixed by: Cabinet Committee on Economic Affairs (CCEA).
- Recommended by: Commission for Agricultural Costs and Prices (CACP).
|
| Purchased by? |
Government |
Sugar Mills
|
| Crops Covered |
22 crops + Sugarcane. |
Specifically for sugarcane.
Sugarcane has both FRP and Minimum Selling Price. |
| Payment Guarantee |
The government commits to buying the crop at MSP if market prices fall below it. No Legal guarantee. |
Legal obligation for sugar mills to pay FRP to sugarcane farmers.
Backed by: Sugarcane Control Order (1966). |
| Basis of calculation? |
- Demand and supply.
- Cost of production.
- Market price trends (Domestic and international).
- Inter-crop price parity.
- Terms of trade.
- 50% margin over the cost of production.
- implications on consumers.
|
- The FRP is based on the recovery of sugar from the cane.
- Sugar recovery is the ratio between sugar produced versus cane crushed, expressed as a percentage.
- The higher the recovery, the higher the FRP, and the higher the sugar produced from the cane.
|
| Penalties for Non-Payment |
No specific penalties were mentioned. |
Cane commissioners can take action, including attachment of mill properties as arrears of land revenue if FRP dues are not cleared within 14 days of the sale. |
- Cabinet Committee on Economic Affairs (CCEA) members: The Prime Minister, the Defence Minister, the Home Minister, the Finance Minister, the Minister of Agriculture and Farmers Welfare and some other senior ministers.
- Commission for Agricultural Costs and Prices (CACP) members. It comprises a Chairman, a Member Secretary, one Member (Official) and two Members (Non-Official). The non-official members are representatives of the farming community and usually have an active association with the farming community.
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Thank you for sharing this informative information.