Karnataka CM Shivakumar asks PM Modi to revise sugar MSP, restore cane ethanol in OMC tenders
Karnataka Chief Minister D.K. Shivakumar has sought the urgent intervention of the Union government to address issues raised by sugarcane farmers, including sugar pricing, ethanol procurement and the fair price paid for cane.
In a letter to Prime Minister Narendra Modi, the Chief Minister listed policy changes and focused action sought by farmers’ associations. He said the State government would fulfil some demands within its remit, including monitoring sugar factories.
The Chief Minister’s letter comes against the backdrop of the Centre’s decision to exclude sugarcane-based ethanol from oil marketing companies’ tenders. Shivakumar asked the Union government to reconsider the decision.
He requested that the Minimum Selling Price (MSP) for sugar be revised. The MSP has remained at ₹31 per kg since February 14, 2019, while the Fair and Remunerative Price (FRP) for sugarcane has risen from ₹2,750 to ₹3,650 per tonne. “Given the sugar price levels of 2019, sugar mills are unable to pay the fair price for sugarcane. Therefore, the Minimum Selling Price of sugar should be revised,” he said.
Forwarding a request from farmers’ associations, the Chief Minister sought a policy change to fix separate MSPs for domestic and commercial sugar. “This would protect domestic consumers while ensuring that bulk commercial buyers pay a fair price and ensure higher profits for sugar mills, so that they could pay higher prices to farmers,” he said.
Shivakumar also objected to the exclusion of ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses in the oil marketing companies’ tender for the 2026-27 period from November 2026 to October 2027. Ethanol produced from C-heavy molasses remains eligible, according to the letter. Karnataka has an annual production capacity of 225 crore litres of sugarcane-based ethanol, it said.
“The exclusion of these raw materials is likely to adversely affect the revenue of sugar mills and diminish their ability to make timely payments to sugarcane farmers. Therefore, this decision should be reconsidered, and a fair allocation should be provided for the production of ethanol from sugarcane-based raw materials, in line with the established capacities of the mills,” he said.
The Chief Minister said that while the FRP payable for sugarcane has increased annually, prices for ethanol produced from sugarcane juice and B-heavy molasses have remained unchanged since 2022-23. In contrast, prices for grain-based ethanol have increased over the last few years. He sought an appropriate revision in the price of sugarcane-based ethanol to offset rising costs.
On the FRP calculation, Shivakumar said the base recovery rate was earlier 9.50% and was increased in stages to 10.25%. When the recovery rate falls below this base level, the FRP is reduced. Sugar recovery depends on factors such as soil, climate and the timing of sugarcane crushing, which are beyond farmers’ control, he said. Consequently, farmers in regions with lower recovery rates do not receive the base FRP. He asked that the base recovery rate be reset to 9.50%.
The Chief Minister welcomed the panel headed by farm scientist Ramesh Chand to look into farmers’ issues. He said the State would participate fully in the committee’s activities and share data. However, with the sugarcane crushing season in Karnataka already delayed, farmers were awaiting an urgent assurance from the Union government, he said. Certain decisions could be taken immediately while the committee continues its work.
Shivakumar said the State government would take all necessary measures to protect the interests of sugarcane growers. These include the installation of digital load cells to prevent irregularities in weighing at sugar factories and monthly monitoring of sugar factories, he said.
