Things To Note About Fair And Remunerative Price. There are various things to note about the Fair and Remunerative price which includes.,
Fair And Remunerative Price
The fair and remunerative price is the is the minimum amount paid by sugarcane mills to the sugarcane farmers. It is determined on the basis of agricultural cost and price. It takes into account factors such as the cost of production,terms of trade prices, impact on general price level, domestic and international prices etc. FRP is used to replace MSP in sugarcane industries and it is based on the Rangarajan Committee report.
The farmer in MSP is paid an amount which is 50% more than the input cost. The methods used in calculating the input cost takes into consideration the cost invested by the farmer, the lease rate of the land etc while the farmer in FSP is paid 70% of the company’s total turnover. This method is good when sugarcane process are high. The sugar companies are asked to pay the MSP when the sugarcane price is low and it usually affects the financial health of the sugar companies when the prices of sugar is low.
MSp is higher than the market price but FSP determines only what the MSP should be.
Fair And Remunerative Price Rate
The rate of FRP for sugarcane is 8% and it is the price legally guaranteed by sugarcane farmers.
How To Find The Selling Price
To find the selling price, you must
- Calculate the total cost of the order
- Use the desired percentage of 20%
- Use markup to calculate the percentage selling price which is calculated as sales price-unit cost/unit cost * 100.
Procurement Price For Fair And Remunerative Price
The procurement price is the minimum support price for crops for years. The minimum support price is however the price which government purchases crops for farmers.
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