Sugar price hike: Karnataka farmers seek nod for huge ethanol units

Jaggery unit near Chikkabyadarahalli in Pandavapura taluk of Mandya district in Karnataka. | Photo credit: MA Sriram

A surge in sugar prices amid reports that sugarcane is being diverted to ethanol production has renewed farmers’ demand for permission to allow jaggery producers in Karnataka to produce ethanol, even as the food industry urged the government to intervene immediately to reduce prices.

While the Center has rejected suggestions that the rise in sugar prices is due to the diversion of sugarcane to ethanol production, farmers’ organizations and food industry representatives say the government’s policy of increasing ethanol blending in petrol is putting pressure on the availability of sugar in the domestic market.

Sugarcane growers in Karnataka, who have long complained of unprofitable prices for their produce, now see a window of hope. “Why should the government restrict the benefits of producing ethanol, which is now used as a fuel additive, to big sugar mills? Local jaggers should be given the technology and permission to produce ethanol,” argued State Sugarcane Growers Association president Kurubur Shanthakumar.

He said ethanol produced by jaggery should be allowed for use as an “eco-friendly” cooking fuel in households, apart from automotive fuel for farmers’ own vehicles and tractors. With the purchase price of ethanol by public sector companies around ₹65 per litre, farmers’ income would increase substantially if they were allowed to sell their surplus, Shanthakumar said.

If allowed, sugarcane growers would no longer be dependent on sugar mills, which he said did not adequately compensate growers. “Even if the government fixes the price and orders the sugar mills to pay the farmers, the factory management will go to court and get a stay,” he said.

While Karnataka produces about 600 lakh metric tonnes of sugarcane annually, barely 30 to 40 lakh metric tonnes goes to local jaggery units and the rest goes to sugar mills. Mr. Shanthakumar said that if jaggery units are allowed to produce ethanol, their number in Karnataka will easily increase from the present 15,000 to 50,000.

Published – 29 Aug 2026 16:54 IST