The Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, has given the green light to a 2.81% rise in the “fair and remunerative price” of sugarcane to Rs 365 per quintal for the Sugar Season 2026-27. This rate is set for a basic recovery rate of 10.25%. Additionally, there will be a premium of Rs 3.56 per quintal for every 0.1% increase in recovery above 10.25%, and a decrease of Rs 3.56 per quintal for every 0.1% decrease in recovery, as per an official statement post the CCEA meeting.
To safeguard the interests of sugarcane farmers, the government has decided not to make any deductions for sugar mills where the recovery rate falls below 9.5%. In such cases, farmers will receive Rs 338.3 per quintal for sugarcane in the upcoming sugar season 2026-27. The cost of production of sugarcane for the same season is noted at Rs 182 per quintal.
The approved fair and remunerative price (FRP) of Rs 365 per quintal at a recovery rate of 10.25% stands 100.5% higher than the production cost. This FRP will be in effect for the purchase of sugarcane from farmers by sugar mills in the Sugar Season 2026-27, commencing from October 1, 2026.
The sugar industry plays a vital role in the livelihoods of approximately 5 crore sugarcane farmers and their dependents, along with about 5 lakh workers directly employed in sugar mills. Moreover, it impacts various ancillary activities like farm labor and transportation. The FRP determination was based on recommendations from the Commission for Agricultural Costs and Prices (CACP) following consultations with state governments and other stakeholders.
In the previous Sugar Season 2024-25, out of the total sugarcane dues payable amounting to Rs 1,02,687 crore, Rs 1,02,209 crore has been disbursed to farmers as of April 20, clearing about 99.5% of the dues. In the ongoing Sugar Season 2025-26, out of the total dues of Rs 1,12,740 crore, Rs 99,961 crore has been paid to farmers by April 20, accounting for around 88.6% clearance of dues.
