Belagavi Introduces First-Of-Its-Kind Sugar Sale Profit-Sharing Formula
Under the agreed payment schedule, farmers will receive an initial advance of Rs 3,500 per tonne.
Belagavi:Sugarcane growers in Belagavi district will receive a basic price of Rs 3,600 per tonne for the 2026-27 crushing season, with a share of additional earnings from sugar sales under a new profit-sharing formula worked out by the district administration.
The agreement was reached after several rounds of discussions between sugar factory owners and farmers’ representatives in the presence of District In-charge Minister Satish Jarkiholi and Deputy Commissioner Rahul Shinde. The factories have agreed to pay Rs 350 per tonne more than the previous season’s rate.
The new formula, described by the district administration as the first of its kind in the country, links the final cane price to the average sugar sale price. While the earlier arrangement involved profit-sharing based on the overall revenue of factories, the revised system will calculate the additional payment based on the average price of sugar sold.
Under the agreed payment schedule, farmers will receive an initial advance of Rs 3,500 per tonne. Another Rs 100 per tonne will be paid after the crushing season ends, taking the basic payment to Rs 3,600.
The final cane bill will be determined before the commencement of the next crushing season, based on the average sugar sale price. The calculation takes into account a fixed factory margin of Rs 11.50 per kg and a sugar recovery rate of 11.50 per cent. Any additional amount over the basic cane price of Rs 3,600 per tonne will be shared, with 75 per cent going to growers and 25 per cent to factories.
According to the agreed rate chart, when the average sugar sale price reaches Rs 48 per kg, the calculated cane price will be Rs 3,650 per tonne. The additional Rs 50 will be shared, with farmers receiving Rs 38 and factories Rs 12 per tonne.
At an average sugar price of Rs 49 per kg, the calculated cane price will be Rs 3,750 per tonne, with growers getting an additional Rs 115 and factories Rs 35. If the average price reaches Rs 50 per kg, the calculated cane price will be Rs 3,850 per tonne, with farmers receiving Rs 190 and factories Rs 60 as additional payment.
At Rs 55 per kg, the calculated cane price will be Rs 4,350 per tonne, generating an additional Rs 750 over the basic price. Of this, growers will receive Rs 565 and factories Rs 185 per tonne.
The agreement comes amid protests by sugarcane growers across Karnataka demanding higher prices and an increase in the State government’s incentive. The district administration said the formula was framed after detailed discussions with farmers and factory owners to protect growers’ interests.
The parties have also agreed to begin crushing operations immediately to prevent losses to farmers due to severe water scarcity and drought conditions.
Following this the farmers have withdrawn their protest.
