Overview
- The Department of Food and Public Distribution issued an office memorandum dated May 29 that formally withdrew the draft order after receiving comments from state governments and industry stakeholders.
- Key proposals now under review included raising the minimum distance between sugar mills from 15 km to 25 km, extending the Fair and Remunerative Price (FRP) to khandsari and crusher units, and requiring licences for gur and khandsari producers.
- Farmer groups and small khandsari and crusher operators objected to the draft, saying the new definitions and licence rules would push informal producers out of the market and could strengthen large mill dominance.
- The government gave no timetable for reissuing a revised draft, leaving regulatory outcomes uncertain and easing immediate tensions in major cane states ahead of the 2027 Uttar Pradesh assembly polls.
- The draft sought to replace the Sugarcane (Control) Order, 1966 under powers of the Essential Commodities Act, a move intended to link sugar regulation with ethanol policy and modern processing but that raised concerns about its impact on rural livelihoods.