Mills Cannot Go Back On Price Change Agreed For Sugarcane In Meeting Convened By CM, With Farmers: Karnataka High Court

The Karnataka High Court has permitted the South Indian Sugar Mills Association (Karnataka) and individual members of the association and factory owners to submit a representation to the Sugarcane Control Board, as regards the additional sugarcane price, which has now been fixed.

Justice Suraj Govindaraj however noted that after agreeing in the meeting convened by the Chief Minister with regard to the price change, where farmers were present, the Mills could not now resile from the agreed rate, and said: “After agreeing in the meeting convened by the Chief Minister with regards to the price change, where even farmers were present, you (petitioners) cannot now seek to go back on the promised price.” 

For context, the State Government by a Government Order dated November 8 has fixed an additional sugarcane price over and above the Fair and Remunerative Price (FRP) fixed by the Central Government for the 2025-2026 sugarcane season. The court is informed that now the new price comes to around Rs 4,300 whereas the FRP itself is Rs 3550.

Further, the petitioners have been permitted to submit a representation to the State Government as regards the immediate payments which are required to be made to sugarcane growers, detailing the problems faced by the factories and for consideration of the difficulties faced by each of the factories so as to reassess the increase in the State Advisory price to be fixed by the respondents.

The court said: “In that view of the matter the Board is to consider the said representation in terms of the Karnataka Sugarcane Regulation of Purchase and Supply Act, 2013, and pass necessary orders as expeditious as possible. In so far as the representation to be submitted to the State Government the State Government is to consider the representation within 3 weeks from the date of receipt of the representations. Relist on February 1st week.”

During the hearing today Senior Advocate K N Phanindra for a petitioner argued that the action of the State Government in passing the impugned order is unilateral and the order is passed without following the Act.

It also pointed out that without hearing the sugarcane growers association it would not be possible to pass any orders and suggested to the petitioners to make them as party respondent.

The plea seeks to quash the Government Order and declare that the State Government has no power to announce higher sugarcane price over and above the FRP fixed by the Union of India. By way of interim relief it was sought to stay the impugned Government Order.

The plea states that the Union of India by a notification dated 05.05.2025 has fixed the sugarcane price at Rs 355 per quintal of sugar cane in other words Rs 3,550 per MT of sugar cane for the recovery of 10.25% of sugar for the Sugar Season 2025-26 which is inclusive of Harvesting and Transportation charges (H & T Charges' for short).

The farmers in Karnataka started agitations for fixing higher sugarcane price over and above the FRP fixed by the Union of India. They had demanded Rs 3,500 excluding H & T Charges payable by the sugar factories.

In other words, if the farmers' demand is accepted then the total cost of the sugarcane price payable would be around Rs 4,400 per MT by the Sugar Factories with recovery 10.25% recovery which is Inclusive of H&T charges, as against FRP Rs 3550 per MT of sugar cane which is inclusive of Harvesting and Transportation charges.

It is claimed in the plea that by succumbing to the farmers' agitation, the Government of Karnataka has issued a Meeting Notice to the Sugar manufacturing units in the State of Karnataka chaired by the Chief Minister and on 07.11.2025.

It is alleged that the Chief Minister forced the Sugar Mills to pay Rs 3,250 per MT excluding H&T charges which comes to Rs 900. Per MT in all the liability will be Rs 4,150/- per MT as against the FRP of Rs. 3550 per MT.

It is argued that the sugar mills repeatedly requested the Chief Minister that they cannot pay the price announced under the notification, which would result in huge losses to the sugar industry.

Case Title: THE SOUTH INDIAN SUGAR MILLS ASSOCIATION (KARNATAKA) & Others AND STATE OF KARNATAKA & Others

Case No: WP 36946/2025

Appearance: Senior Advocate H N Shashidhar, for Advocate H S Suhas for Petitioner.