Govt keeps floor price of sugarcane unchanged at Rs 536.36 per quintal

Published On: December 27, 2019 08:34 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 27: The government has left the floor price of sugarcane unchanged at Rs 536.56 per quintal for the current fiscal year – FY2019/20 – including a subsidy of Rs 65.28 per quintal.

The cabinet meeting held on Monday fixed the floor price and the subsidy, according to a press release issued by the Ministry of Communication and Information Technology. 

The floor price includes minimum production cost of farmers, transportation fares, profits and the subsidy announced by the government.

Floor price is the minimum price that farmers get for their crops and it is normally announced before the harvest upon recommendation of the Ministry of Agriculture and Livestock Development. This year, it has been delayed almost by a month.

Urmila KC, under secretary at the Ministry of Industry, Commerce and Supplies, said that the government fixed the floor price after taking consent of farmers and sugar mills. According to her, the minimum support price includes Rs 378.39 per quintal in production costs, and transport fares and profit totaling Rs 92.89 per quintal.

For the past few years, the government has been fixing the floor price of sugarcane every year in a bid to end confrontations between sugarcane farmers and sugar producers. 

Though the government has been fixing the floor price of sugarcane every year, farmers still have to struggle to receive payments from sugar producers and the government subsidy. According to Nepal Sugarcane Producers’ Association, farmers are yet to receive around Rs 1 billion for the sugarcane sold to mills last year.

KC said the ministry time and again has asked the sugar producers to clear outstanding dues of farmers on time. The mill operators and farmers had even entered into an agreement in January. As per the agreement, mill owners were supposed to release payment to farmers with 45 days of the purchase. But mill owners have not yet cleared outstanding payments of farmers even though new crushing season is about to begin.

Sugarcane growers have to contend with not only tight-fisted mill owners but also the slow-moving government bureaucracy to get their subsidies. The government is still to provide farmers with subsidies worth Rs 1.50 billion, including Rs 20 million of FY2017/18.

Last February, agitated farmers halted vehicular traffic on the East-West Highway as part of their protest against slow disbursement of government subsidy. After the farmers took to the streets, concerned government authority assured farmers that the subsidy amount would be released within seven days. However, the government has failed to keep its promise till date.

This year, the government enforced the Sugarcane Subsidy Guideline 2019 – a revised edition of the guideline of last year – to provide farmers with the subsidy amount on time. It is yet to be seen whether the government implement its own guideline.

Interestingly, government agencies blame each other for the delay in release of subsidy. Officials of the commerce ministry points fingers at the agriculture ministry for the delay. “Had the concerned ministry initiated the process of releasing the budget on time, the farmers would not have suffered to this limit,” a source at the commerce ministry said requesting anonymity.

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