After a gap of three years, the government on Wednesday decided not to increase the minimum price that mills need to pay to sugarcane farmers for each quintal of the cane they bring to the factories. Union minister Prakash Javadekar said the fare remunerative price (FRP) for the next sugar season starting October will be Rs 275 per quintal.

It also approved the proposal to create a buffer stock of 40 lakh tonne in its bid to improve the liquidity position of sugar mills and enable them to clear the cane arrears, which is estimated to be more than Rs 15,000 crore. Industry sources said this was third time in recent history when the government decided not to change the FRP. “The FRP has increased quite steeply in the last few years and sugarcane has outstripped the returns to farmers from other crops. This decision will restore some balance amongst the crops,” said Abinash Verma of ISMA, the apex body of sugar mills.