State Advised Prices (SAP)

• Vaid's ICS, Lucknow
• 25, Aug 2021

Why in News?

The Punjab government has recently increased the state Advised Prices

Price Determination of Sugarcane

• Federal Government
• State Government

The Federal/Central Government announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.

• The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

Commission for Agricultural Costs and Prices (CACP):

• The Commission for Agricultural Costs and Prices (CACP) is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India.
• It came into existence in January 1965.
• It is an advisory body whose recommendations are not binding on Government.

Basis of price determination:

• With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
• The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
• This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.

What is FRP?

• FRP is fixed under a sugarcane control order, 1966.
• It is the minimum price that sugar mills are supposed to pay to the farmers.
• However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.

Facts for Prelims:

The Kola Peninsula:

The Kola Peninsula is a peninsula in the extreme northwest of Russia, and one of the largest peninsulas of Europe.