Govt hikes sugarcane FRP by 2.81% to ₹365/quintal for 2026–27 season

The Centre on Tuesday raised the Fair and Remunerative Price (FRP) for sugarcane by 2.81% for the 2026–27 sugar season.

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the FRP of ₹365 per quintal for sugarcane at a base recovery rate of 10.25%, Information and Broadcasting Minister Ashwini Vaishnaw told reporters after the meeting.

The government will pay a premium of ₹3.56 per quintal for every 0.1 percentage point increase in sugar recovery above 10.25%, and apply a similar reduction for lower recovery levels.

However, it has set a floor to protect farmers, saying there will be no deductions for mills with recovery below 9.5%. In such cases, farmers will receive ₹338.3 per quintal in the 2026–27 season.

The sugar season runs from October to September, and the revised FRP will be applicable from October 1, 2026.

The government said the FRP of ₹365 per quintal is 2.81% higher than the current 2025–26 season and is about 100.5% above the estimated cost of production of ₹182 per quintal.

Vaishnaw said the decision would result in payments of around ₹1 lakh crore to sugarcane farmers and described the increase as significant.

The move will also enable ethanol production from surplus sugarcane, he added.

The FRP has been fixed based on recommendations of the Commission for Agricultural Costs and Prices (CACP) after consultations with state governments and other stakeholders.

Sugar mills are mandated to purchase sugarcane from farmers at the FRP or above.

The sugar sector, one of the country’s key agro-based industries, supports the livelihoods of about 5 crore sugarcane farmers and their dependents, besides providing direct employment to around 5 lakh workers in mills and related activities.

According to official data, about 99.5% of the ₹1.02 lakh crore dues were paid to farmers in the 2024–25 sugar season.

In the ongoing 2025–26 season, around 88.6% of ₹1.12 lakh crore dues have been cleared so far.