This paper examines the nature, changes and factors responsible for issues and problems faced by the sugarcane growers and sugar mills in India. This paper is based on the latest available secondary data and existing literature. The result reveals that the State’s price policy and failure of regulatory mechanisms are the major factors responsible for the problems of sugarcane sector. Apart from these factors, the dominance of private mills, falling sugar prices in markets due to fall in global crude oil prices and Brazilian currency may also be factors responsible to some extent, but not as much as claimed by the sugar mills. This paper also found that the short-term measures initiated by the State are inadequate and ineffective to tackle the long-term problems in the sugarcane sector. Finally, this paper suggests that there is need to revise the role of State intervention and the State should take into consideration the needs and consequences before providing assistance or putting new regulations on the sugarcane sector.