Sugarcane Arrears Escalate to Rs 16,087 Crore in 2025-26 Season
Sugarcane arrears across India have surged to Rs 16,087 crore during the 2025-26 crushing season, marking a significant increase of Rs 2,049 crore from the previous season. This rise has raised serious concerns among industry experts regarding the timely payment to farmers, as highlighted at a recent two-day conclave and hackathon organized by the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
State-Wise Breakdown of Pending Dues
Uttar Pradesh ranks third in terms of pending dues, with 121 sugar mills owing Rs 3,287 crore to farmers as of February 16. Maharashtra and Karnataka report even higher arrears, with amounts of Rs 4,252 crore and Rs 4,956 crore, respectively. These figures underscore the widespread financial challenges faced by the sugar industry in key producing states.
Current Sugar Production and Mill Operations
As of March 31, 2026, India's total sugar production stood at 272.31 lakh tonnes, reflecting a 9% increase from 248.78 lakh tonnes during the same period last year. However, the number of operational mills has declined sharply, with only 56 mills currently active across the country, compared to 95 mills a year ago.
In Uttar Pradesh, production has remained steady at 87.5 lakh tonnes, matching last year's output. Yet, operational mills have dropped to 28 from 48 during the corresponding period last year. Maharashtra and Karnataka have recorded production of 99.3 lakh tonnes and 47.90 lakh tonnes, respectively, up from 80.26 lakh tonnes and 39.94 lakh tonnes last year. With the crushing season nearing its end, only four mills are operational in these two states combined.
Financial Strain Due to Price Mismatch
ISMA director Deepak Ballani explained to TOI that the mismatch between sugar prices and rising cane costs is severely straining mill finances. He noted, "The Minimum Support Price (MSP) has remained at Rs 31 per kilogram since 2019, while the Fair and Remunerative Price (FRP) has increased to Rs 355 per quintal. This growing gap is driving losses and causing delays in payments to farmers."
Ballani further emphasized that with production costs hovering around Rs 40 per kilogram, the current MSP is economically unviable for mills. "We have urged the government to revise the MSP in line with actual costs to sustain the industry and protect nearly five crore sugarcane growers," he added.
State-Level Price Variations
In addition to the centrally fixed FRP, states announce their own State Advised Price (SAP), which is typically higher. For instance, in Uttar Pradesh, the SAP stands at Rs 390 per quintal, which is Rs 35 above the FRP. This disparity adds another layer of complexity to the financial dynamics affecting both mills and farmers.
