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Q13 (IAS/2015) Economy ā€ŗ Agriculture & Rural Economy ā€ŗ Agricultural price policy Official Key

The Fair and Remunerative Price (FRP) of sugarcane is approved by the

Result
Your answer: ā€”  Ā·  Correct: A
Explanation

The FRP is approved by the Cabinet Committee on Economic Affairs (CCEA) on the basis of the cost of production recommended by the Commission for Agricultural Cost and Prices (CACP).[1] This is an important distinction to understand: while FRP is determined by the central government on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP)[2], the final approval authority rests with the CCEA.

MSP is the price paid by government to farmers for procurement, whereas FRP is the price fixed by government but is paid by mill owners. FRP is fixed by government only for sugarcane.[3] The CACP plays a crucial advisory role by recommending the price based on cost of production and other factors, but it is the Cabinet Committee on Economic Affairs that has the authority to approve and finalize the FRP that sugar mills must pay to farmers.

Sources
  1. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > MINIMUM SUPPORT PRICE > p. 328
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Q. The Fair and Remunerative Price (FRP) of sugarcane is approved by the [A] Cabinet Committee on Economic Affairs [B] Commission for Agriā€¦
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 2.5/10 Ā· 7.5/10
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This is a classic 'Authority vs. Advisory' trap. The question tests if you can distinguish between the technocratic body that calculates/recommends (CACP) and the political executive body that formally approves (CCEA). It is a fair, standard question found in every serious economy resource.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Does the Cabinet Committee on Economic Affairs approve the Fair and Remunerative Price (FRP) of sugarcane in India?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.18 Previous Years Questions > p. 328
Presence: 5/5
ā€œā€¢ 1. The Fair and Remunerative Price (RFP) of sugarcane is approved by the [2015] ā€¢ (a) Cabinet Committee on Economic Affairsā€¢ (b) Commission for Agricultural Costs and Pricesā€¢ (c) Directorate of Marketing and Inspection, Ministry of Agricultureā€¢ (d) Agricultural Produce Marketing Committeeā€
Why this source?
  • Snippet explicitly names the Cabinet Committee on Economic Affairs (CCEA) as the approving authority for the Fair and Remunerative Price (FRP) of sugarcane in a previousā€‘years question item.
  • Direct statement linking FRP approval to CCEA provides the most explicit support among the snippets.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 10: Agriculture - Part I > 10.3 Minimum Support Price (MSP) > p. 306
Presence: 4/5
ā€œFor sugarcane, Ministry of Consumer Affairs, Food and Public Distribution recommend Fair and Remunerative Price (FRP), while some States announces their own State Advised Price (SAP). SAP/FRP is the price at which mill owners are bound to purchase sugarcane from the farmers and it is done through 'Sugarcane Control Order 1966' under the Essential Commodities Act 1955. There are two separate things, one is declaration/announcing of MSP and the other is procurement of food grains at MSP by Govt. Agencies. The purpose of announcing MSP is not that Govt. is going to purchase all the crops under MSP, rather its purpose is that the farmers should get that minimum price.ā€
Why this source?
  • States that the Ministry of Consumer Affairs, Food and Public Distribution recommends the FRP for sugarcane, identifying the recommendation stage of the process.
  • Shows FRP is an announced price (binding on mill owners), implying a formal central approval step follows recommendation.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > MINIMUM SUPPORT PRICE > p. 328
Presence: 3/5
ā€œIt is the price at which government purchases crops from the farmers. If there is a bumper harvest, then the fall in the price cannot go below the MSP. It acts as a guarantee price to protect farmers from distress sale. MSP was first announced for wheat in 1966-67. Like MSP, there is another concept called Fair and Remunerative Price (FRP). MSP is the price paid by government to farmers for procurement, whereas FRP is the price fixed by government but is paid by mill owners. FRP is fixed by government only for sugarcane. It is because owing to its weight-losing properties, sugarcane must reach mills within a stipulated time.ā€
Why this source?
  • Clarifies that FRP is fixed by the government (and specifically applies only to sugarcane), indicating central government involvement in FRP fixation.
  • Supports the premise that a central authority (such as CCEA) is the plausible approving body for FRP.
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Statement analysis

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Statement analysis

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Consider the following : 1. Areca nut 2. Barley 3. Coffee 4. Finger millet 5. Groundnut 6. Sesamum 7. Turmeric The Cabinet Committee on Economic Affairs has announced the Minimum Support Price for which of the above ?

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Fixation of price levels for wheat and rice by the Commission for Agriculture Costs and Prices (CACP) is an example of ?