The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Tuesday approved a 2.81 per cent increase in the “fair and remunerative price” of sugarcane to Rs 365 per quintal for Sugar Season 2026-27 (October-September) for a basic recovery rate of 10.25 per cent.  

There will be a premium of Rs 3.56 a quintal for each 0.1 per cent increase in recovery over and above 10.25 per cent, and a reduction in price by Rs.3.56 per quintal for each 0.1 per cent decrease in recovery, according to an official statement issued after the CCEA meeting.

The government, with a view to protect interest of sugarcane farmers, has also decided that there shall not be any deduction in case of sugar mills where recovery is below 9.5 per cent. Such farmers will get Rs 338.3 per quintal for sugarcane in the ensuing sugar season 2026-27, the statement said.

The cost of production (A2 +FL) of sugarcane for the Sugar Season 2026-27 is Rs 182 per quintal. This fair and remunerative price (FRP) of Rs 365 per quintal at a recovery rate of 10.25 per cent is higher by 100.5 per cent over production cost, it noted.

The FRP approved shall be applicable for the purchase of sugarcane from the farmers in the Sugar Season 2026-27 (starting with effect from October 1, 2026) by sugar mills.

The sugar sector is an important agro-based sector that impacts the livelihood of about 5 crore sugarcane farmers and their dependents, and around 5 lakh workers directly employed in sugar mills, apart from those employed in various ancillary activities, including farm labour and transportation, the statement said.

The FRP has been determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP), and after consultation with state governments and other stakeholders, the statement said.

In the previous Sugar Season 2024-25, out of sugarcane dues payable of Rs 1,02,687 crore, Rs 1,02,209 crore cane dues have been paid to farmers, as on April 20, thus, about 99.5 per cent of cane dues have been cleared. In the current Sugar Season 2025-26, out of sugarcane dues payable of Rs 1,12,740 crore, Rs 99,961 crore cane dues have been paid to farmers, as on April 20; thus, about 88.6 per cent cane dues have been cleared, the statement added.