The National Federation of Cooperative Sugar Factories Limited (NFCSF) has sought urgent intervention from Prime Minister Narendra Modi to safeguard the livelihoods of over five crore sugarcane farmer families across the country, citing mounting financial stress in the sugar sector due to stagnant sugar prices and rising production costs.
In a letter addressed to the Prime Minister, NFCSF Chairman Harshvardhan Patil said that although sugarcane farmers are paid the Fair and Remunerative Price (FRP), overall payments to farmers have declined in recent years. Total cane payments fell from Rs 2.15 lakh crore in the 2022-23 sugar season to Rs 2.03 lakh crore in 2024-25, resulting in an estimated Rs 12,000 crore annual loss in farmers’ income.
He pointed out that while states such as Maharashtra and Karnataka have implemented the Rangarajan Committee’s revenue-sharing mechanism, farmers are not benefiting as sugar price realisation by mills continues to remain below the cost of production. The cost of sugarcane production has crossed Rs 4,000 per tonne, including harvesting and transportation, whereas the average sugar realisation is around Rs 2,375 per quintal, making it difficult for mills to clear cane dues on time.
Raising concerns over market distortions, Patil said nearly 70 per cent of India’s annual sugar consumption is accounted for by large institutional buyers such as beverage companies, food processors, hotels, restaurants, and confectionery manufacturers. These bulk consumers procure sugar at the same price as retail household consumers, depriving farmers of any benefit beyond the FRP and leading to prolonged distress in cane-growing regions.
The NFCSF has demanded that the Minimum Selling Price (MSP) of sugar be dynamically linked with the FRP and ethanol prices, similar to the support mechanism available to rice and wheat farmers.
It proposed that raising the sugar MSP to Rs 150 per kg would not impose a burden on the government exchequer and could generate an additional Rs 28,000 crore benefit for rural households by increasing cane prices by about Rs 2,670 per tonne.
While acknowledging the government’s success in achieving the 20 per cent ethanol blending target well ahead of schedule, Patil expressed concern that the share of sugarcane-based ethanol under the Ethanol Blending Programme (EBP) has declined sharply to below 30 per cent. He attributed this to reduced allocation by oil marketing companies and the absence of ethanol price revision since 2022, which has further strained the finances of sugar mills and farmers.
He warned that the prevailing price environment is forcing farmers to shift from sugarcane to crops such as paddy and maize, which are more water-intensive and fertilizer-dependent, thereby increasing environmental stress and import dependence. The Federation asserted that sugarcane-based ethanol is more sustainable, cost-effective, and resource-efficient compared to grain-based ethanol.
Calling sugarcane, a crop of national importance, the NFCSF urged the government to launch a National Sugarcane Mission using a cluster-based approach, enhance ethanol allocation to the sugar industry, revise ethanol procurement prices, promote long-term power purchase agreements for green power generated by sugar mills, and introduce a dynamic pricing formula aligned with FRP and input costs.
Patil said strengthening the sugarcane sector is closely aligned with the vision of Atmanirbhar Bharat, as it promotes renewable energy, reduces import dependence, generates rural employment, and supports inclusive growth. The Federation appealed for timely policy intervention to ensure a fair, remunerative, and sustainable pricing framework for sugar and ethanol to protect millions of small and marginal farmers across the country.
