Centre withdrew draft Sugarcane (Control) Order 2026 needing revisiting after objections from state governments and stakeholders.
Draft sought replacing 60-year-old 1966 Order with new framework bringing ethanol and khandsari sectors under government regulation.
Khandsari units and farmers opposed the move; existing rules define khandsari as 20+ workers with no capacity limit.
The Centre has withdrawn the draft Sugarcane (Control) Order, 2026, saying it needs to be revisited in the light of objections received from state governments and other stakeholders.
The Food Ministry had circulated the draft for public comments, with a May 20 deadline.
"Based on the suggestions/comments received from state governments and other stakeholders, it is considered necessary to revisit the draft Sugarcane (Control) Order, 2026," the ministry said in an office memorandum.
The draft sought to replace the 60-year-old Sugarcane (Control) Order, 1966, with a new regulatory framework that proposed, among other things, bringing the ethanol and khandsari sectors under government regulation.
The move drew opposition from khandsari units and farmers. The draft had proposed redefining a khandsari unit as one with more than 10 workers and a crushing capacity of over 500 tonnes per day. Under the existing rules, a khandsari unit is defined as one with 20 or more workers, with no capacity limit.
Sources said the proposed definition would have brought a large number of small-scale, labour-intensive units under the regulatory ambit, adversely affecting farmers who generally receive better prices from khandsari units than from sugar mills.
BJP MP Sanjeev Balyan, who represents Muzaffarnagar in Uttar Pradesh, said on social media the government had decided to withdraw the order "in the interest of farmers".
"This demonstrates that under the leadership of Prime Minister Narendra Modi, the government formulates every policy by placing the consent of the farmers and their welfare above all," he said.