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The study examines the economic efficiency of the Indian sugar industry in terms of managerial functions, namely, procurement, processing and marketing. Factors that determine the performance of the functions are identified, and the efficiency of these determining factors are classified. The study is basically a statistical analysis of data on the costs and returns of a sample of 115 sugar mills for the year 1997-98. The cane industry is beset with problems like cane leakage and dependence on sources of cane outside the command area, the incidence of cane procurement taxes, and a nonlinear (decreasing positive) effect of the duration of the crushing season on the processing capability of mills. Cooperation units are at the top in terms of both procurement and processing indices. The average performance of private factories is best only with respect to the realization of free-market price and the generation of …