Karnataka pledges to revive debt-ridden cooperative sugar factories 

INDIA – The Karnataka government has unveiled a plan to revitalize the state’s struggling cooperative sugar factories, many of which have ceased operations due to financial difficulties.  

With 30 cooperative sugar factories in Karnataka, only 13 are currently functional, while the remaining have faced closures over the years. 

In a move aimed at rejuvenating these factories, Karnataka’s Sugar Minister Shivanand Patil announced that the government intends to extend low-interest loans to debt-ridden factories. This decision marks a departure from the previous administration’s policy of leasing non-operational sugar factories to private entities. 

Minister Patil assured sugarcane farmers of the government’s commitment to addressing fraud in weighing sugarcane at factories.  

“The farmers should not hesitate to file complaints. The government will support them by registering criminal cases. Additionally, complainants will be rewarded with Rs 1 lakh (US$1,175.22), and the government will take responsibility for crushing their sugarcane,” Patil said. 

In another key development, the government announced plans to relocate the office of the Sugar Commissioner from Bengaluru to Belagavi.  

Minister Patil also stated that digital weighing machines would be installed in sugarcane-growing areas to ensure accurate measurements and fair dealings for farmers. While some sugar industries have contested this initiative in court, the government has reaffirmed its commitment to safeguarding farmers’ interests. 

Protests by farmers’ leaders in November underscored the urgency of addressing arrears owed by sugar factories. According to the State Sugar Commissionerate, arrears across the state total around Rs 850 crore (US$99.89M), with Rs 600 crore (US$70.5M) owed by factories in northern Karnataka.  

Earlier this month, the state government waived electricity dues amounting to Rs 52.25 crore (US$6.14M) for the State-owned Mysuru Sugar Company Ltd. (Mysugar) in Mandya district. 

The state’s efforts to stabilize the sugar industry come amid a nationwide decline in sugar production.  

Data from the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) revealed a 17 percent drop in sugar production during the ongoing 2024-25 sugar marketing year, which runs from October to September.  

As of December 15, 2024, India’s sugar output stood at 61.39 lakh tonnes, down from 74.05 lakh tonnes during the same period last year. 

The delayed commencement of crushing operations in key sugar-producing states like Maharashtra and Karnataka has contributed to the production dip.  

Karnataka’s sugar output fell to 13.85 lakh tonnes, a decline from 17.56 lakh tonnes in the previous marketing year. 

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