File photo of sugarcane being transported to sugar mills on bullock carts in Athani taluk of Belagavi district.
The Karnataka government managed to mediate and end the nine-day protest by farmers in the northern districts by announcing an additional ₹100 in fair and remunerative price (FRP) for sugarcane, which now stands at ₹3,300, including ₹50 to be contributed by the state government and sugar mills. However, given the ownership pattern of the state’s sugar mills, many of which are owned by powerful families across the political spectrum, and prevailing central laws, the truce looks fragile.
The order for the revised FRP was issued after several rounds of discussions with farmers and after the Chief Minister met with farmers and mill representatives. Farmers were demanding ₹3,500 per tonne apart from cutting and transport charges.
The state government is now challenged to make mills pay the mandated price of ₹3,250 per tonne for a sugar recovery rate of 10.25% across the state. The Center had a fixed FRP of ₹3,400 per tonne last year and mills paid between ₹2,700 and ₹2,900 per tonne, excluding cutting and transport charges.
Reluctance to pay
Government sources said some factory owners, including the Nirani brothers — Murugesh Nirani, former minister and BJP leader, and Hanumant Nirani, MLC — strongly opposed the chief minister’s proposal. They argued that a ₹50 increase in the base price meant a loss of ₹100 crore and that their conglomerate would not be able to absorb it.
In Karnataka, out of a total of 81 sugar mills, one is in the public sector and 11 are in the cooperative sector. The rest is in the private sector. The Nirani family alone controls about 20 factories in North and South Karnataka. Most of the privately owned/managed sugar mills are with highly influential political families, either associated with the Congress or the BJP and in some cases both, which has historically prevented governments from taking tough decisions.
The FRP order of 2025 issued by the Center envisages a basic sugar yield of 10.25%, as against the FRP order of 2024, which fixed the basic yield rate at 9.5%. The 2025 order requires factories to pay an extra ₹34.6 for every one percent increase in recovery. Factories can deduct a similar amount in case of lower yields.
Recovery is a complex issue and depends on crop variety, harvest time and the use of efficient machinery in factories. Another former minister and BJP leader Ramesh Jarkiholi, whose family owns or manages several sugar mills, said the average recovery in Karnataka is only 10.5%, while the average recovery in Maharashtra is between 11% and 12%. “Only factories that get higher sugar yield can pay higher prices, which we cannot,” he said.His brother Satish Jarkiholi is a minister in the Siddaramaiah-led Congress government.
What laws govern
Another problem is directive laws. “The sugar mill owners reminded the state government that most of the laws regulating sugar and sugarcane are central laws. The policies and executive orders controlling the export of sugar and by-products and ethanol blending are issued and modified by the Centre, they said. The Belagavi factory owner said his two units have multi-state licenses and are regulated by the central sugar ministry and not the state government,” said a senior official from the Karnataka Agricultural Commission.
This subtly indicated the position of the proprietors on the role of the state government in dealing with the sugarcane protest by pointing to its limited jurisdiction. “Most millers were reluctant to follow the government’s directives on higher prices,” admitted the official.
Published – 9 Nov 2025 20:03 IST
