Union Minister Pralhad Joshi has written to Karnataka Chief Minister Siddaramaiah, blaming the state’s policies for the current sugarcane crisis. The minister said the Congress government has hidden central reforms and wrongly shifted responsibility onto the Union.
“Blaming the Centre is unfair. It has kept prices stable and helped diversify the market,” Joshi wrote. “But enforcing payments, irrigation work, and subsidy disbursement is a state responsibility that can’t be ignored.”
Joshi reaffirmed that the central government is fully committed to farmer welfare, price stability in the sugar sector, and long‑term sustainability.
Key points of the letter
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Power purchase agreement (PPA) – Maharashtra moved to a new PPA in April 2025, but Karnataka is still stuck with the 2017‑18 deal. Joshi said the lack of a new PPA deprives sugar mills of steady revenue, which hurts both farmers and the industry.
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Higher power tariffs – Karnataka raised electricity rates twice: 70 paise per unit in April 2023 and an additional 36 paise in April 2025. The minister said the hikes cut incomes and pushed transportation costs up to ₹750–₹800 per tonne over the past three years.
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Road tax increase – A 3 % surcharge on new commercial vehicles, introduced under the Karnataka Motor Vehicles Tax Amendment Act 2024, adds extra cost for farmers.
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Missing state advisory price (SAP) – The Centre sets a minimum Fair and Remunerative Price (FRP), but states can declare a higher SAP to protect farmers. Karnataka has yet to announce one.
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“Guarantee schemes” – Joshi accused the state of tightening financial controls and heavy taxes while calling its schemes ineffective, saying they have crippled the productive sectors.
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Central farming support – The centre set the 2025‑26 FRP at ₹355 per quintal of sugarcane with a 10.25 % recovery rate, giving a margin of over 105 % above production cost. This record step, according to Joshi, improves farmer income.
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Ethanol blending – The federal ethanol blending program is credited with creating alternative revenue streams for mills and better prices for farmers.
Joshi concluded that with the state’s policy lapses, “how fair is it to blame the centre?” He highlighted that cane arrears nationwide are now at a historic low, thanks to continued pro‑farmer policies.
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