Sugar mills in Karnataka are staring at losses of around ₹4,000 crore following a state government order mandating higher payments to sugarcane farmers.
In an order dated November 8, 2025, Chief Minister Siddaramaiah directed sugar mills to pay farmers ₹400 per tonne more than the Centre’s Fair and Remunerative Price (FRP) for sugarcane. While the move is aimed at supporting farmers, industry representatives warn it will significantly strain the financial health of sugar mills.
Mill owners argue that sugar prices and ethanol realisations have not risen enough to absorb the additional cost burden. As a result, both cooperative and private mills fear mounting losses, delayed payments, and difficulties in maintaining operations during the crushing season.
Industry bodies have urged the state government to reconsider the decision or provide financial support, warning that prolonged stress could impact sugar production, ethanol blending targets, and timely payments to farmers in the future.
