UP election to Maharashtra cooperatives: Why sugar is at the heart of rural politics

UP election to Maharashtra cooperatives: Why sugar is at the heart of rural politics

Sugar is at the heart of rural politics in several of India’s biggest sugar-producing states, linking farmers, politically influential mills and household prices. That equation is under fresh strain as sugar prices rise across the country.

The timing is significant for Uttar Pradesh, India’s largest sugarcane-producing state, which votes in the 2027 Assembly election. The 2022 UP polls were also shaped by sugarcane politics.

The all-India average retail sugar price rose to Rs 52.3/kg on August 18, while Kolhapur wholesale prices jumped nearly 20% since August to Rs 5,350 per 100 kg.

In UP, retail prices rose from Rs 48.18/kg on July 20 to Rs 55.70/kg on August 20. The Centre has allowed 1 million tonnes of duty-free raw sugar imports to ease prices.

Sugarcane and cane payments were a major issue in western Uttar Pradesh during the 2022 Assembly election campaign. Farmers complained about delayed payments and arrears from sugar mills. Around the time of the election, reports put total cane arrears in Uttar Pradesh at Rs 3,752 crore, out of Rs 4,445 crore owed nationally.

The Yogi Adityanath government responded by increasing the state-advised price (SAP) of sugarcane in September 2021. The price for early-maturing and common varieties was raised to Rs 350 per quintal, while other varieties received lower rates. The government said the increase would benefit around 45 lakh farmers.

But farmer leaders argued that the hike was inadequate in the face of rising diesel and input costs, while cane-payment arrears remained a campaign issue in western UP.

The BJP returned to power, winning 255 of the 403 Assembly seats, while the Samajwadi Party won 111. The BJP and its allies secured 273 seats in all. However, the sugar issue remained a significant factor in the poll outcome in western UP.

Why is sugar politically sensitive in UP?

The sugar economy creates a three-way political balancing act.

For farmers, the key issue is the price of sugarcane and timely payment by mills. For sugar mills, higher cane prices raise production costs, while weak sugar prices can squeeze margins and delay payments. For consumers, the concern is the retail price of sugar.

Governments therefore have several policy levers: they can influence the cane price, regulate sugar sales and exports, support mills, alter ethanol policy and use imports or stockholding restrictions to manage domestic supplies.

Maharashtra shows how deeply the sugar industry can become embedded in political organisation.

Western Maharashtra's cooperative sugar mills have historically been important centres of rural economic and political power.

It connects cane growers with credit, procurement, employment and local institutions. Control over a cooperative can therefore provide a political network extending well beyond the factory itself.

The Congress and NCP historically built substantial political influence in western Maharashtra through these cooperative networks.

A recent example came from Baramati, one of Maharashtra's most politically watched constituencies.

In 2025, late Deputy Chief Minister Ajit Pawar personally entered the election for the Malegaon Cooperative Sugar Mill, turning what was formerly a cooperative election into a major political contest. His panel eventually won 20 of the 21 seats, defeating a panel backed by Sharad Pawar's NCP (SP).

The election was widely seen as significant because of the Pawar family's longstanding association with Baramati and Maharashtra's cooperative sector.

Karnataka provides another example of the link between sugarcane economics and electoral politics.

Ahead of the 2023 Assembly election, Belagavi and neighbouring sugar-producing areas saw agitation over sugarcane prices and farmers' dues. Karnataka had then more than 70 sugar mills across 16 districts, making the sector particularly important in several constituencies. Farmers were openly discussing which political party would support their demands.

The political importance of sugar was also visible in the candidate pool. In the Belagavi region, several sugar-industry figures were contesting the election, while farmer groups were seeking commitments from parties on sugarcane prices and payments.

Higher prices can improve mill finances and their ability to clear farmers’ cane dues, but they can also raise the cost for consumers and add to food inflation.

Governments therefore regularly intervene through export curbs, import policy, stock limits, monthly sales quotas and ethanol policy. The latest price surge has already triggered moves to ease domestic supplies.

For Uttar Pradesh, the stakes are higher. Sugarcane is concentrated in politically important parts of western and central UP, making cane prices and mill dues key rural issues, while higher retail sugar prices can hurt consumers.

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