Nitin Gadkari was speaking at opening ceremony of Solapur-Osmanabad highway.
As sugarcane farmers in Maharashtra plan to launch an agitation next month to highlight their grievances, Union Minister Nitin Gadkari on Wednesday blamed "external factors" for the prevailing crisis.
Speaking at the opening ceremony of the Solapur-Osmanabad highway in Solapur district of Maharashtra in the presence of Prime Minister Narendra Modi, Mr Gadkari said PM Modi has taken "historic decisions to resolve the issues of sugarcane farmers".
"Sugarcane farmers are in a serious crisis. But this is not a problem created by us. It's a problem caused due to the global economy. The sugar produced in Brazil sells for Rs 19 per kg. This is destroying sugarcane farmers and sugar factories. The Prime Minister has taken some significant steps to address this," Mr Gadkari said.
"This is historic. Till date, there has never been such a huge package for sugarcane farmers. He has taken the decision that from now, sugar will not be sold for less that Rs 29 per kg. And for sugar exports, there will be a subsidy. Now, we will wipe off the tears of sugarcane farmers and PM should get credit for this historic step. I want to thank Modi ji on behalf of Maharashtra and the farmers here for this," Mr Gadkari told the gathering.
Solapur has nearly 40 sugar factories and in western Maharashtra, traditionally a stronghold of the Congress and the NCP, sugar crisis is a huge election issue as well. Assembly elections due in Maharashtra next year.
Sources say Congress President Rahul Gandhi and NCP Chief Sharad Pawar discussed the sugarcane crisis in their meeting on Wednesday evening and plan to target the government for not paying attention to the farmer issues.
Meanwhile, the leader of the Swabhimani Shetkari Sanghatan, a Maharashtra-based farmers body, Raju Shetti, has warned that sugarcane farmers will launch a 'halla bol' agitation if the properties of sugar mills who have not paid farmers are not seized by January-end.
The government is trying to strike a balance between urban consumers and sugar manufacturers, and more importantly sugarcane farmers, currently in a precarious position.
According to Mr Gadkari, the solution is to move away from sugar production towards production of ethanol.
"I want to request to you that please do not produce sugar. We want you to produce ethanol from 4 per cent molasses. We have given permission for producing ethanol from sugarcane juice and we have increased the rate for that to Rs 58. The ethanol economy is worth Rs 11,000 crore and the Prime Minister wants the farmers of the country to get relief by taking the ethanol economy to Rs 1 lakh crore. The more ethanol you produce, the more Government of India will buy. The price is also good and farmers will benefit from it," Mr Gadkari said.
Grievances of sugarcane farmers have been earlier mentioned by opposition leaders. Congress President Rahul Gandhi last week attacked the BJP over unpaid dues to sugarcane farmers. He claimed that sugarcane factories in Uttar Pradesh and Maharashtra "have not paid nearly Rs 11,000 crore to farmers" while the Prime Minister has embraced Anil Ambani and given him Rs 30,00 crore.
NCP Chief Sharad Pawar has also written to the Prime Minister highlighting the woes of sugarcane farmers, informing him about the "financial desperation" in the community. Mr Pawar has asked for immediate steps to be taken to prevent any "mass revolt" by farmers.