CM writes to PM seeking revision of sugar MSP, order on ethanol production

Close on the heels of holding consultations with the protesting sugarcane farmers and representatives of sugar mills, Chief Minister D.K. Shivakumar has written to Prime Minister Narendra Modi seeking revision of the Minimum Selling Price (MSP) of sugar as sugar mill owners have agreed to pass on returns from any increase in MSP of sugar to farmers.

In the letter written on Friday, the Chief Minister pointed out that the MSP of sugar has remained unchanged at ₹31 per kg since 2019, though the FRP (Fair and Remunerative Prices) for sugarcane has risen from ₹2,750 to ₹3,650 per tonne during this time. Pointing out that the selling prices of sugar stood at ₹45 per kg, he argued that a revision in MSP for sugar would not raise consumer prices. 

He recalled that the representatives of all the sugar mills, who attended a meeting of farmers and mill owners convened by him on October 26 in Belagavi, had assured farmers that any increase in the MSP of sugar would be passed on to them.

Income from ethanol

He pointed out that the Union Department of Food and Public Distribution had, on October 22, 2026, directed that ethanol shall not be produced from sugarcane juice, syrup and B-heavy molasses in the Ethanol Supply Year 2026-27. But Karnataka’s cane-based distilleries had earned ₹5,803.70 crore from ethanol in 2025-26, almost entirely from these routes, and this income had helped sugar mills pay farmers within 14 days. But the new directive had come in the way of sugar mills’ payments to farmers, he said. 

He appealed to the Prime Minister to change the directive and also to revise the price of cane-based ethanol, which has remained unchanged since 2022-23 for juice and B-heavy molasses. The Chief Minister further demanded restoration of the FRP base recovery to 9.50%, so that farmers in low-recovery areas were not penalised for soil and climate conditions.

He also sought to prescribe separate MSPs for domestic and commercial sugar to protect household domestic consumers while bulk buyers pay a fair price.

Revenue-sharing formula

He sought a review of the revenue-sharing formula to include ethanol and co-generation revenue as its constituents, and the setting up of a Price Stabilisation Fund, as recommended by the NITI Aayog Task Force and the Commission for Agricultural Costs and Prices. 

Mr. Shivakumar sought to bring to the Prime Minister’s notice that the Central Committee chaired by Ramesh Chand had heard the sugarcane farmers and the experts, while the State government had placed a detailed representation before the Committee. 

He said that while the State government had taken measures to implement farmers’ demands that were in its domain, some other demands that were in the Centre’s domain were yet to be implemented. The farmers were awaiting an assurance from the Centre even as the cane crushing season had been delayed amid prospects of cane yield getting reduced this year due to drought, he said.