UPSC Prelims Practice Questions — Panel to study issues of sugarcane farmers

Q1. With reference to the recovery-linked Fair and Remunerative Price (FRP) of sugarcane, consider the following statements: Which of the statements given above is/are correct?

  1. Because the price payable for cane depends on the sugar recovery attributed to the mill, under-reporting of recovery would reduce farmers' receipts even if their cane is weighed correctly.
  2. Under-weighment of cane at the mill gate would reduce farmers' receipts even if the mill's recovery is reported correctly.
  3. The premium payable for recovery above the basic recovery rate is borne by the Central Government as an incentive, and not by the sugar mill.
  • A. 1 and 2 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q2. With reference to the Fair and Remunerative Price (FRP) of sugarcane, consider the following statements: Which of the statements given above is/are correct?

  1. The FRP is determined on the recommendation of the Commission for Agricultural Costs and Prices after consultation with State Governments and other stakeholders.
  2. The FRP is payable by sugar mills for the cane they purchase, and not by any government procurement agency.
  3. The FRP fixes only a floor, so mills are free to pay cane farmers more than the FRP.
  • A. 1 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 2 and 3 only

Q3. With reference to the Fair and Remunerative Price (FRP) of sugarcane and the ex-mill Minimum Selling Price (MSP) of sugar, consider the following statements: Which of the statements given above is/are correct?

  1. The Minimum Selling Price of sugar obliges the government to purchase any sugar that mills are unable to sell above that price.
  2. The FRP is a floor on the price of a farm product payable to growers, whereas the Minimum Selling Price is a floor on the price of a processed product realised by mills.
  3. Unlike the Minimum Support Price announced for crops such as wheat, the FRP of sugarcane is paid by the mills that buy the cane rather than through government procurement.
  • A. 1 and 2 only
  • B. 3 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. An increase in the ex-mill Minimum Selling Price of sugar automatically raises the price that sugar mills must pay farmers for sugarcane.
  2. The ex-mill Minimum Selling Price of sugar was designed with reference to the Fair and Remunerative Price of sugarcane and the minimum cost of converting cane into sugar.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q5. Consider the following assertion: 'Fixing the price of sugarcane administratively while leaving the price of sugar largely to the market can lead to the accumulation of cane price arrears.' Which of the statements given above support/supports the assertion?

  1. Sugar mills' capacity to pay for cane depends largely on what they realise from the sale of sugar.
  2. The FRP is payable by mills for the cane they buy, irrespective of the price at which they are able to sell sugar.
  3. The ex-mill Minimum Selling Price of sugar is revised by the Centre at the start of every sugar season along with the FRP.
  • A. 1 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 2 and 3 only

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The Rangarajan Committee on the sugar sector proposed sharing of revenue between farmers and millers as a way to reduce cane price arrears.
  2. When the price of cane moves with the revenue that mills actually realise, mills' payment obligations to farmers stay aligned with their capacity to pay.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q7. With reference to the regulation of sugarcane pricing and procurement in India, consider the following statements: Which of the statements given above is/are correct?

  1. The Rangarajan Committee on the sugar sector recommended that States should not declare a State Advised Price for sugarcane.
  2. A State Advised Price is recommended by the Commission for Agricultural Costs and Prices and approved by the Cabinet Committee on Economic Affairs for States that request it.
  3. A sugar mill to which a cane reservation area is assigned is obliged to purchase cane offered by farmers within that area.
  • A. 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1 and 2 only

Q8. In 2026, the Centre allowed bulk consumers of sugar to hold stocks of up to 30 days' requirement instead of 15 days, on the condition that the additional stock is sourced only from sugar imported under the Advance Authorisation Scheme or the Tariff Rate Quota. The most likely purpose of this condition is:

  • A. To let bulk users build larger inventories without drawing more sugar from the domestic market
  • B. To lift mill-gate sugar prices by diverting more domestic sugar towards bulk industrial users
  • C. To channel the additional stocks into the central pool for supply through the public distribution system
  • D. To raise customs revenue by steering bulk users towards imports that attract full duty