Withdrawal of Sugarcane Control Order Amendments 2026 Sparks Debate Over Farmer Rights and Industry Regulation
The Indian Central government has withdrawn the draft amendments to the Sugarcane Control Order of 1966 following significant pushback from farmers’ groups, unorganised gur and khandsari units and certain millers. The decision, announced on May 27, 2026, marks a pivotal moment in the ongoing dialogue between agricultural stakeholders, and policymakers.
Context of the Draft Amendments
The proposed amendments, open for public feedback until May 20, 2026, aimed to regulate gur and khandsari units by requiring licenses and mandating the payment of the Fair and Remunerative Price (FRP) to farmers. These provisions sparked immediate controversy, as they were perceived as disproportionately impacting small-scale producers.
According to the source text, gur and khandsari units account for approximately 31% of India’s annual sugarcane production, which totals around 435 million tonnes. These units, often run by local entrepreneurs or farmers themselves, operate using traditional methods such as “kolhu-crushers.” In Uttar Pradesh, key sugarcane-growing districts like Meerut, Muzaffarnagar, and Bijnor host thousands of such units, with estimates suggesting 2,000–3,000 manufacturing units per major district.
Farmers’ Concerns and Key Criticisms
Farmer groups, including the Bharatiya Kisan Union (Apolitical), raised several objections to the draft. One major point of contention was the definition of “crushers,” with unions arguing that modern “kolhus” should be categorized by crushing capacity rather than roller size. They also opposed the classification of “shakkar” (jaggery powder) alongside raab and khandsari sugar, contending that “shakkar” is essentially a jaggery product and should not be treated as a sugar derivative.
Another critical issue was the FRP calculation mechanism. The unions argued that the current system, which relies heavily on sugar recovery rates, fails to account for additional revenue streams from by-products like ethanol, compressed biogas (CBG), and molasses. They demanded that these income sources be factored into cane price determinations.
farmers highlighted the timing mismatch between sugarcane harvesting and payment. While sugar mills typically begin operations when sugar recovery exceeds 9%, farmers often require immediate cash during October–November to prepare for wheat sowing. The draft’s provision to link payments to recovery rates was seen as exacerbating this challenge.
Government Response and Implications
The official withdrawal order cited feedback from state governments and stakeholders as the rationale for revisiting the draft. This move is viewed as a strategic decision to avoid escalating tensions ahead of the 2027 Uttar Pradesh Assembly elections. However, the controversy underscores deeper conflicts between regulatory frameworks and the needs of unorganised sectors.
Cooperative sugar millers proposed adopting the Gujarat model for cane payments, which includes tiered instalments based on previous and current-year sugar recovery. They also advocated retaining a 15% interest rate on delayed payments beyond 14 days. Meanwhile, private millers expressed concerns about increased scrutiny under the draft provisions.
Looking Ahead
The withdrawal of the draft amendments reflects the complex interplay between policy reform and grassroots resistance. As the government reevaluates its approach, the focus will likely shift to balancing regulatory oversight with the protection of small-scale producers. The outcome of this deliberation could shape the future of India’s sugarcane industry, particularly for unorganised sectors reliant on traditional practices.
The debate also raises broader questions about the role of by-products in agricultural pricing and the need for inclusive policymaking. With the upcoming Assembly elections in Uttar Pradesh, the government’s handling of this issue will be closely watched by farmers, millers, and industry analysts alike.