KATHMANDU, April 10: Police have arrested Brij Mohan Gupta, the financial manager of Eastern Sugar Mill, for not paying outstanding dues to sugarcane farmers.
District Administration Office, Sunsari, arrested Gupta on Monday after the mill promoter Anuj Agrawal went out of contact.
Eastern Sugar Mill is still to pay around Rs 440 million to farmers.
The mill management had signed an agreement at the Ministry of Industry, Commerce and Supplies in the last week of March to pay all outstanding dues to farmers by April 5, 2018. However, the mill did not pay the farmers within the deadline.
Police swung into action and arrested Gupta after the mill management ignored reminder for payment issued by the ministry, according to Santosh Bista, the personal secretary to Ministry for Industry, Commerce and Supplies Matrika Prasad Yadav.
Following Gupta's arrest, people related to the mill had reached District Administration Office, Sunsari, and made commitment to clear outstanding dues at the earliest. But Gupta is still in police custody.
According to industry ministry officials, police swung into action after Minister Yadav wrote to the Ministry of Home Affairs, directing the local administration to arrest owners of Shree Ram Sugar Mill, Annapurna and Indira Sugar Mill along with Eastern Sugar Mill for not releasing payment to farmers as agreed earlier.
Sugar mills across the country owe a combined Rs 9 billion to farmers for sugarcane purchased over the past few years.
In the last week of March, the industry ministry organized a joint meeting with mill owners and sugarcane growers. In the meeting, mill owners had told the industry minister that they would pay all outstanding dues to farmers by April 5.
Farmers are in big trouble as sugar mills are not releasing payments citing one reason or the other. While Everest Sugar Mill of Mahottari owes farmers Rs 1.40 billion, dues of Indu Shankar Sugar Mill of Sarlahi have piled up to Rs 1.3 billion. Similarly, Reliance Sugar Mills of Bara (Rs 1 billion), Shree Ram Sugar Mills (Rs 680 million), and Annapurna Sugar Mills of Sarlahi (Rs 300-Rs 350 million) have not paid farmers for long.
Protracted delay in releasing payments by mills and fixing minimum support price by the government has affected the income of farmers and ultimately sugarcane production. Sugarcane production increased slightly this year following drop in production in the past few years.
Altogether 12 sugar mills are in operation across the country. Sugarcane farming is done in 80,931 hectares of land. Around 100,000 farmers are involved in sugarcane farming, according to conservative estimates.