Discuss the Centre-State tension arising from the coexistence of the Fair and Remunerative Price and State Advised Price for sugarcane.

Cane carries two prices: the Fair and Remunerative Price (FRP), fixed by the CCEA on CACP advice under the Sugarcane (Control) Order, 1966 — ₹355/quintal for 2025-26 [1] — and the higher State Advised Price (SAP) announced by states such as Uttar Pradesh and Punjab. Their coexistence makes cane a recurring federal flashpoint.

Legal roots of the dual price

• Cane falls under the Concurrent List (Entry 33, trade in foodstuffs): the Centre acts through the Essential Commodities Act, 1955, while states legislate under laws like the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953.
• A Supreme Court Constitution Bench (2020) settled the legal question — a state may fix an SAP above the Centre's minimum price, though never below it [2].
• The Centre itself accepts that a state is free to "top up" the FRP [1]. The dispute is therefore political, not justiciable.

Where the friction bites

• Cost without consent: the FRP is consultative and recovery-linked (₹3.46/quintal for each 0.1% above 10.25% recovery) [1]; SAP is flat, election-sensitive and delinked from recovery or ex-mill realisation.
• Mill viability and arrears: where SAP outruns what sugar prices support, mills default, and cane arrears become a rural-distress problem the Centre must defuse through export quotas and buffer stocks — in a sector where India is the world's largest producer and consumer of sugar [4].
• Split incentives: neither government bears the fiscal cost of the other's price, while assured high prices push water-intensive cane into already stressed tracts.

The conflict is less a jurisdictional quarrel than a misalignment of incentives between the price-setter and the payer. The Rangarajan Committee's 70:30 revenue-sharing formula, adopted through Centre-State consultation, offers a durable middle path [3], while ethanol diversion — including the 2025 scheme converting cooperative mills into multi-feed plants [5] — is lifting mill realisations enough to make a genuinely remunerative cane price sustainable. Cooperative federalism, not competitive populism, must anchor cane pricing.