The cabinet committee on economic affairs (CCEA) has announced an increase of 17.25 per cent in the statutory minimum price for sugarcane in the country.

The increase is aimed at compensating farmers for the increasing cost of cultivation in the country. After the new price is rolled out, the sugar mills in the country will have to pay at least Rs 170 per quintal as the fair and remunerative price (FRP) for cane in the coming season compared to Rs 145/quintal in the current season.

The new season begins on October 1, when the farmers will offer the production at higher minimum rate. The increase in price will increase in the working of the sugar mills in the country that are already facing a difficult financial position due to weak cash flows.

India is the biggest sugarcane producer in the world and is current export the production due to record production in 357.66 million tonnes in 2011-12. The government had earlier removed a cap on the export of the item to help sugar mills to clear their dues, amounting to as much as Rs 10,000 crore, to the farmers.