Cabinet approves Fair and Remunerative Price of Rs.365/qtl for Sugarcane Farmers for season 2026-27

**Executive Summary** The Cabinet Committee on Economic Affairs has approved a Fair and Remunerative Price (FRP) of Rs. 365/qtl for sugarcane for the 2026-27 sugar season, effective from October 1, 2026. This decision is intended to benefit 5 crore sugarcane farmers and 5 lakh workers by providing a price that is 100.5% higher than the cost of production. The approved rate represents a 2.81% increase over the current 2025-26 sugar season. **Key Points / Main Content** **Pricing and Recovery Standards** * **Base FRP:** Set at Rs. 365/qtl for a basic recovery rate of 10.25%. * **Recovery Adjustments:** A premium of Rs. 3.56/qtl is provided for every 0.1% increase in recovery above 10.25%; conversely, the FRP is reduced by Rs. 3.56/qtl for every 0.1% decrease in recovery. * **Minimum Guaranteed Price:** To protect farmers, no deductions will be made for sugar mills with recovery rates below 9.5%. Farmers in this category will receive a fixed rate of Rs. 338.3/qtl. **Economic Metrics** * **Cost Coverage:** The cost of production (A2 + FL) for 2026-27 is estimated at Rs. 182/qtl. The approved FRP of Rs. 365/qtl provides a margin of 100.5% over this cost. * **Year-on-Year Growth:** The 2026-27 FRP is 2.81% higher than the Rs. 355/qtl rate set for the 2025-26 season. * **Effective Date:** The new prices are applicable for sugarcane purchases starting from October 1, 2026. **Administrative and Payment Context** * **Determination Basis:** The FRP was determined following recommendations from the Commission for Agricultural Costs and Prices (CACP) and consultations with State Governments. * **Cane Dues Status:** For the 2024-25 season, 99.5% of dues (Rs. 1,02,209 crore) have been cleared as of April 20, 2026. For the current 2025-26 season, 88.6% of dues (Rs. 99,961 crore) have been paid as of the same date. **Impact Analysis** **Sugarcane Farmers (Ganna Kisan)** **Impact** Approximately 5 crore farmers and their dependents will receive higher remuneration for their crops, ensuring a profit margin of over 100% relative to production costs. They are also protected from price volatility in cases of low sugar recovery. **Action Required** Provide sugarcane to mills during the 2026-27 season (commencing October 1, 2026) and ensure payment is received according to the new recovery-linked pricing structure. **Sugar Mills** **Impact** Mills are legally required to purchase sugarcane at the revised FRP and must adjust their financial planning to accommodate the 2.81% increase in procurement costs. **Action Required** Implement the new pricing of Rs. 365/qtl and the revised recovery-based premium/reduction calculations for all sugarcane purchases effective October 1, 2026. **Sugar Mill Workers and Ancillary Labour** **Impact** The decision supports the livelihoods of approximately 5 lakh workers directly employed in mills and additional workers in ancillary activities like farm labour and transportation. **Action Required** No specific action required; the policy aims to maintain the stability and viability of the agro-based sugar sector.

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