‘Sugarcane crisis due to state govt’s failure’: Union Minister to K’taka CM

New Delhi, Nov 12 (IANS) Union Minister for Consumer Affairs, Food, and Public Distribution Pralhad Joshi wrote to Karnataka Chief Minister Siddaramaiah, saying that the sugarcane crisis in the state is due to the policies undertaken by the incumbent Congress government. 

He accused the state of concealing the Centre’s reform measures and unfairly blaming the Union government. “It is not right to blame the Centre as the government has ensured both price stability and market diversification. However, enforcement related to payment implementation, irrigation, and subsidy disbursement lies with the state government -- and this responsibility cannot be ignored,” he said.

Joshi clarified that the Central government remains committed to ensuring the welfare of farmers, stability in the sugar sector, and long-term sustainability and prosperity.

He cited multiple examples to argue that the state government is responsible for the current distress among sugarcane growers and mills.

He said that neighbouring Maharashtra has already implemented a new electricity power purchase agreement (PPA) effective April 2025, but Karnataka still operates under the 2017-18 PPA.

The Union Minister said that PPAs provide assured income for production units and sugar mills, enabling them to secure bank financing. However, Karnataka’s failure to renew its PPA has deprived sugar mills of a stable revenue stream, Joshi noted.

The state government increased power tariffs twice — In April 2023, by 70 paise per unit, and again in April 2025, by an additional 36 paise per unit as a surcharge.

“These increases have further reduced the income of both farmers and sugar mills,” Joshi said.

He said that due to these tariff hikes, transportation costs have gone up to Rs 750-Rs 800 per tonne in the past three years.

Furthermore, under the Karnataka Motor Vehicles Tax (Amendment) Act 2024, the government imposed an additional 3 per cent road tax on new commercial vehicles - adding further costs to farmers, Joshi wrote.

He pointed out that while the Centre’s Fair and Remunerative Price (FRP) is only a minimum benchmark, states are free to declare a higher State Advisory Price (SAP) to protect farmers’ interests - but Karnataka has not announced any SAP so far.

“The State Government should have focused on easing the burden on farmers,” Joshi said. “Instead, in the name of ‘guarantee schemes,’ it has crippled the productive sectors of the economy.”

Joshi accused the State of showing “indifference” toward sugarcane farmers and mills, even as it tightened financial controls and imposed heavy taxes on key sectors.

“According to the minister, the state’s financial and regulatory policies have aggravated the crisis for both sugar mills and sugarcane growers,” he said.

He questioned, “When the state’s own lapses have worsened the situation, how fair is it to shift the blame to the centre?”

The centre, Joshi noted, has fixed the FRP for 2025-26 at Rs 355 per quintal of sugarcane at a 10.25 per cent recovery rate - based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

This provides a margin of over 105 per cent above production cost, a record step in farmer welfare, he said.

“Through the Ethanol Blending Programme, the Centre has strengthened the sugar sector by creating alternative, stable income sources for sugar mills and ensuring better prices for farmers,” he said.

He said that due to the Centre’s consistent pro-farmer policies, FRP has steadily increased every year, and cane arrears nationwide are now at a historic low.

--IANS

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