Industry Urges Hike in Sugar MSP Following Sugarcane FRP Increase

01-May-2025 11:26 AM

New Delhi. Welcoming the government's decision to raise the Fair and Remunerative Price (FRP) of sugarcane by 4% for the 2025–26 marketing season (October–September), the Indian Sugar and Bio-energy Manufacturers Association (ISMA) has urged the Centre to also revise the minimum selling price (MSP) of sugar and the price of ethanol accordingly.

In an official statement, ISMA described the FRP hike as a progressive, farmer-friendly move that reinforces the government’s commitment to the welfare of sugarcane growers.

The association emphasized that while the decision will lead to a significant increase in farmers’ income, it will also raise operational costs for sugar mills, necessitating an upward revision of both sugar and ethanol prices to maintain financial balance in the sector.

ISMA estimates that the revised FRP will result in over ₹20,000 crore in additional income for approximately 5.5 crore sugarcane farmers across the country. Consequently, total payments made by sugar mills to growers are projected to rise to around ₹1.20 lakh crore.

The statement further highlighted the broader economic impact of the FRP hike, noting that it will benefit the forward-linked sugar sector as well.

However, ISMA stressed the importance of safeguarding the financial health of sugar mills, warning that the additional burden of increased FRP could strain the industry’s ability to make timely payments to farmers.

“To ensure stability and sustainability across the entire value chain, it is essential that the MSP of sugar and the ethanol procurement price be adjusted in proportion to the FRP increase,” the association asserted.

This, it said, would enable mills to operate viably while continuing to support the government’s rural development and clean energy goals.