14 Feb 2014

Sugarcane FRP Raised to Rs.220 Per Quintal: Price Triples in A Decade Significant Rise in MSP of All Crops Over the Years

Government of India
Government has announced the Fair and Remunerative Price (RFP) for sugarcane for the 2014-15 sugarcane season. The RFP has been raised to Rs. 220 per quintal from Rs. 210 for 2013-14. 
A state is free to top up the FRP and decide the price that sugar mills must pay to sugarcane farmers in that state. The price recommended by the Central Government has almost tripled in the last ten years, from Rs. 74.50 per quintal for 2004-05 season. 
Minimum Support Prices (MSP) for rabi crops for 2014-15 marketing season, announced earlier, also show a significant increase over the years. Wheat MSP for the current crop is Rs. 1400 per quintal whereas it was Rs. 640 per quintal ten years back. 
In the same period, rice MSP has gone up to Rs. 1310 per quintal from 560 /quintal. The MSP for tur (arhar, pigeonpea), a major pulse crop, has been raised this year to Rs. 4300 per quintal; it was Rs. 1390 /quintal a decade back. 
Similar significant increases have occurred in the case of oilseeds; mustard MSP for the current crop is Rs. 3050 while it was just Rs. 1700 per quintal in 2004-05.
 The present groundnut MSP at Rs. 4000 per quintal has more than doubled from Rs. 1500 per quintal in 2004-05.
 Substantial hike in MSP has resulted in better prices available to farmers for their produce. This has also led to overall food security for the country: India is now self-sufficient in wheat and rice. The country is expecting a record foodgrain production this year.
 While rice, wheat and major coarse cereals are purchased by procuring agencies, government helps producers of pulses, oilseeds and some other crops by market intervention when prices tend to fall below the MSP. 
So that farmers do not have to resort to distress sale of their produce, the government is strengthening the procurement infrastructure. In the case of sugarcane, the sugar mills are required to pay the FRP 9of the State Administered Price if that is above the RFP) to the farmer.

The graph below shows the rise in support prices of major crops over the years:

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