Union Minister Nitin Gadkari has issued a stark warning about the sugar industry, revealing that his own cooperative sugar units in Vidarbha are bleeding around ₹ 40 crore annually. Gadkari blamed a global oversupply of sugar and ethanol — especially due to massive, mechanized production in Brazil — for driving down prices, making it hard for Indian sugar factories to stay profitable. He pointed out that the cost of producing sugar in India (about ₹ 32/kg) is significantly higher than in Brazil (around ₹ 24/kg), cutting into factory margins.
Sugar mills in India must adhere to strict rules, such as paying cane farmers within 15 days and meeting monthly sales quotas. These constraints limit flexibility, he argued.
In Vidarbha, sugarcane recovery rates are only ~11%, which is lower than more efficient regions. Even a 1% drop in recovery can lead to losses of ~₹ 7 crore, according to Gadkari.
Gadkari emphasized that ethanol production has been a lifeline for the sugar sector.
He said farmers must diversify, turning from just food crops to fuel (ethanol), bioenergy, and other value‑added products. Gadkari called for experimentation with newer farming technologies, such as micro-irrigation, soil testing, and AI, to help reduce costs and improve productivity.
He linked farmer distress, especially suicides in Maharashtra’s Vidarbha and Marathwada regions, to water scarcity, urging better water management. Gadkari defended continuing to run loss‑making sugar plants, saying they support the livelihoods of ~25,000 people per factory and are important for agricultural communities.
There are allegations of conflict of interest: Critics say Gadkari is aggressively promoting ethanol while his family has interests in ethanol-producing companies. Gadkari has denied wrongdoing, calling some of the accusations a “paid campaign” against him.
