Karnataka Sugarcane Crushing Operations to Accelerate Following Price Agreement

Sugarcane crushing activities in Karnataka are set to gain momentum following Diwali, as protesting farmers in the northern districts have agreed to an initial price of ₹3,600 per tonne. The pricing agreement was reached during a meeting held to finalise sugarcane rates for the 2026-27 crushing season.

Under the terms agreed upon by mill owners, an advance payment of ₹3,500 per tonne will be disbursed, marking an increase of ₹350 compared to the previous year. The Belagavi district administration facilitated this arrangement by introducing a profit-sharing mechanism designed to balance the interests of both growers and mill operators. The agreed payment structure includes an initial instalment of ₹3,500 per tonne, with an additional ₹100 per tonne scheduled for release after the conclusion of the crushing season. Furthermore, any final payments will be linked to the average market price of sugar per kg prior to the start of the subsequent crushing season. Industry sources indicate that approximately seven mills have already commenced operations in the State, with several others expected to follow suit shortly.

Despite the arrangement in Belagavi, the consensus is not universal. On Friday, members of the Sugarcane Growers Coordination Committee, Karnataka, staged a demonstration in Bengaluru to register their opposition to the newly established pricing mechanism.

Kurubur Shantakumar, State president of the Indian Sugarcane Farmers Association, criticised the Belagavi pricing formula as unscientific. He argued that growers in districts with lower sugar recovery rates should receive a minimum of ₹4,500 per tonne. A memorandum outlining these concerns was submitted to State Sugar Minister Rudrappa Lamani.

The protesting association has called for the implementation of a State Advised Price (SAP). Their demands include factoring in profits derived from the by-products of sugar mills to provide an additional incentive over the Central Government's Fair and Remunerative Price (FRP). To support their stance, the growers pointed to existing state-level policies in other regions, noting Tamil Nadu's incentive structure of ₹709 per tonne and Punjab's SAP of ₹4,480 per tonne.

Additionally, the farmers requested that the FRP be calculated on an ex-field basis, ensuring that payments are made directly at the farm gate. They argued that this adjustment would prevent potential financial deductions related to harvesting labour and transportation costs.

"Agribusiness operations heavily rely on predictable supply chains and consensus between raw material producers and processors. While the pricing agreement in northern districts allows crushing operations to proceed post-Diwali, the ongoing protests highlight the persistent challenge of balancing input costs, profit-sharing formulas, and grower margins in the agricultural sector. For long-term operational stability, processors must engage constructively with all farmer factions to address cost structures transparently." — Dr. Shishir Gupta, Founder & CEO, StartupLanes