Despite of being a fifth largest producer of sugarcane, Pakistan has to import a sizeable sugar to meet the domestic requirements owing to lower cane yield and sugar recovery. Some of the sugar mills started development activities in their surrounding areas for promoting cultivation of high yielding and more sugar recovery varieties to overcome this problem. Present study was planned to estimate the profitability of sugarcane crop among both beneficiary and non-beneficiary farms of these development activities. Detailed data were collected from 100 randomly selected growers (50 beneficiaries and 50 non-beneficiaries) during April, 2010. The beneficiary farmers were operating significantly larger land holdings. Area under new high yielding, with more sugar recovery varieties was relatively higher at beneficiary farms as compared to non-beneficiary farms. The beneficiary farmers were getting higher returns from sugarcane production (fresh and ratoon crops) as compared to non-beneficiary farms. Inclusion of small and medium farmers in the sugar mills development activities is recommended to meet the sugar consumption requirements of the country by domestic production and ultimately reduction in sugar import.