The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Tuesday, 6 May 2025, approved a 2.81 per cent increase in the fair and remunerative price (FRP) of sugarcane to ₹365 per quintal for Sugar Season 2026-27 (October–September), applicable at a basic recovery rate of 10.25 per cent. The revised FRP is 100.5 per cent higher than the cost of production, which stands at ₹182 per quintal.

Key Details of the FRP Revision

Under the revised pricing structure, sugar mills will pay a premium of ₹3.56 per quintal for every 0.1 per cent increase in recovery above 10.25 per cent. Conversely, a reduction of ₹3.56 per quintal will apply for every 0.1 per cent fall in recovery below that threshold, according to an official statement issued after the CCEA meeting.

In a move to protect farmers supplying to mills with lower efficiency, the government has decided that no deduction will be made where recovery falls below 9.5 per cent. Farmers in this category will receive ₹338.3 per quintal during Sugar Season 2026-27. The revised FRP will be effective from 1 October 2026.

Why the Hike Matters for Farmers

The sugar sector directly supports the livelihoods of approximately 5 crore sugarcane farmers and their dependents, along with nearly 5 lakh workers employed in sugar mills. Millions more are engaged in ancillary activities including farm labour and transportation, making the FRP revision one of the most consequential agricultural pricing decisions of the year.

The FRP has been determined on the basis of recommendations from the Commission for Agricultural Costs and Prices (CACP), following consultations with state governments and other stakeholders. This structured approach is designed to ensure that the price reflects actual input costs while providing a meaningful surplus over production expenditure.

Cane Dues Clearance: Where Things Stand

In Sugar Season 2024-25, out of total cane dues payable of ₹1,02,687 crore, mills had cleared ₹1,02,209 crore — approximately 99.5 per cent — as of 20 April, according to the official statement. In the ongoing Sugar Season 2025-26, dues payable stand at ₹1,12,740 crore, of which ₹99,961 crore — about 88.6 per cent — had been cleared as of the same date, indicating that a meaningful portion of farmer payments remains outstanding.

What Happens Next

Sugar mills will be required to purchase sugarcane from farmers at the revised FRP from the start of the new season on 1 October 2026. The government's continued monitoring of dues clearance suggests that timely payment compliance will remain a focal point in the months ahead. Industry bodies and state governments are expected to align their state-advised prices (SAP) in line with the revised federal benchmark in the coming weeks.