The Centre’s announcement of an 8 per cent increase in the Fair and Remunerative Price (FRP) for sugarcane to ₹340 per quintal for the upcoming 2024-25 sugar season (October to September), strives for a fine balance between incentivising farmers to expand their cane area and keeping a lid on inflation. A hike in FRP was much needed this year because sugar production in India which was charting a smooth upward trajectory until 2021-22, has suffered a sharp setback in the last two years thanks to El Nino. Total sugar output for the 2023-24 season is now estimated at about 330 lakh tonnes, down from 366 lakh tonnes in 2022-23 (394 lakh tonnes the year before). Though the sugar industry claims that the current year’s output will comfortably meet domestic consumption of 280 lakh tonnes, past instances of sugar output undershooting estimates at the fag end of the season seem to have prompted the Centre to err on the side of caution.