Sugar Prices Hit 16-Year High While Farmers Face Rs 16,087 Crore Dues: AIKS

The All India Kisan Sabha (AIKS) has launched a stinging attack on the Union Government over its sugar sector policies, alleging that the policies enrich private sugar mills and corporate processors while denying sugarcane farmers their statutory dues. The critique comes amidst a sharp surge in sugar prices, which have climbed to a 16-year high across domestic markets.  

In a press statement issued on August 24, 2026, by AIKS President Rajan Kshirsagar and General Secretary Ravula Venkaiah, the farmers' union highlighted a growing contradiction within the sugar economy. Ex-mill sugar prices have jumped to Rs 5,400-Rs 5,500 per quintal from Rs 3,900 a year ago. Retail prices now average Rs 58.23 per kg nationally, reaching up to Rs 64.72 per kg in Odisha and Rs 60-Rs 70 per kg in several regional markets.  

AIKS pointed out that out of an annual sugarcane crop of 440 million metric tonnes (MMT) yielding 33-35 MMT of sugar, a major portion of the wealth is captured by processors and industrial buyers. Between 60% and 75% of domestic sugar consumption is driven by industrial sectors- including food processing, beverages, and pharmaceuticals - rather than household buyers. Furthermore, 76-95 MMT of raw cane (18-20% of total crush) is diverted toward the government's E20 biofuel target, offering mills lucrative revenue streams from ethanol, cogenerated power, pressmud, and bagasse without passing any share to the farmers.

Despite record revenue realizations, national sugarcane arrears for the 2025–26 crushing season stand at Rs 16,087 crore. State-wise figures compiled by AIKS reveal heavy backlogs:  

Karnataka: Rs 4,956 crore  
Maharashtra: Rs 4,252 crore  
Uttar Pradesh: Rs 3,287 crore  

In Maharashtra alone, where 210 mills crushed 1,045 lakh tonnes generating a gross FRP payable of Rs 40,446 crore, 168 mills had failed to clear their dues in full as of February, leaving Rs 4,898 crore unpaid. AIKS criticized authorities for failing to enforce the statutory 14-day payment mandate or levy the mandatory 15% penal interest rate on delayed dues. It also cited the distress sale of cooperative assets, such as Gujarat’s Mandvi Cooperative Mill - with assets valued at Rs 250 crore - sold to private players for just Rs 37 crore.  

The union labeled the official Fair and Remunerative Price (FRP) of Rs 355 per quintal (at 10.25% recovery) a "statistical deception" by the Commission for Agricultural Costs and Prices (CACP). While the government claims a 105.2% margin over the A2+FL cost (Rs 173/quintal), that margin drops to 44.3% when measured against the comprehensive C2 cost (Rs 246/quintal). Under the Swaminathan Formula ($C2+50\%$), the baseline FRP should be Rs 456 per quintal, scaling up to Rs 548–Rs 563 per quintal after accounting for yield variations, risk, and management costs. Moreover, AIKS accused the government of ignoring the Rangarajan Committee and NITI Aayog recommendations, which entitle farmers to a 75% share of sugar realizations or 70% of sugar plus by-product revenues (working out to Rs 380–Rs 407 per quintal).  

To counter retail inflation, the government recently approved duty-free imports of 1 MMT of raw sugar and imposed dealer stock limits. AIKS condemned these moves as mechanisms to depress domestic cane prices while abandoning poor consumers by refusing to reinstate sugar under the Public Distribution System (PDS).  

AIKS 7-Point Demands
Reinstatement in PDS: Procure and distribute sugar via the ration system at subsidized rates.  
Arrears & Bonus: Immediately clear the Rs 16,087 crore national arrears with 15% statutory interest and pay a bonus of Rs 1,200 per tonne over the FRP for 2025–26.  
C2+50% FRP Fixation: Set the baseline FRP at Rs 456 per quintal and target Rs 548–Rs 563 per quintal by resolving CACP accounting flaws.  
Legal Revenue Sharing: Guarantee farmers a statutory 75% share of net realized value, including ethanol and all by-products.  Halt Privatization: Stop distress auctions and corporate takeovers of farmer-owned cooperative sugar mills.  
Stop Duty-Free Imports: Ban duty-free sugar imports used to artificially suppress domestic cane prices.  
Statutory MSP Guarantee: Enact a national law guaranteeing Minimum Support Price at C2+50% across all agricultural crops.