Bitter case of sugar price fixing

Published On: October 14, 2018 02:30 AM NPT By: Republica  | @RepublicaNepal

Apart from being visibly apathetic toward the woes of sugarcane farmers, the government authorities responsible for handling sugar supplies and market monitoring are found to have committed serious negligence in fixing the price of sugar in the local market, at the cost of financial burden to the customers just ahead of Dashain, Tihar and Chhath—the festivals when the demand for sugar in the market goes high. Nepal’s sugarcane farmers have been incurring huge loss for years. In a number of places in Tarai plains, sugar mills have not made payment to the sugarcane farmers and even if they have, they have paid much less than the deserving price. As a result, sugarcane farmers have to launch protests, now and again, to make the government heed their concerns. Yet the government authorities often take decisions that favor more the mills owners than the actual farmers who sustain those mills and keep their businesses running through their hard work. As if this negligence is not enough, government officials, including the minister for supplies, are found to have fixed the market price of sugar in way that adds financial burden to the customers already battling with inflation.

According to the sub-committee of parliament’s Public Accounts Committee, various government officials and sugar mills have acted in collusion with sugar mills to artificially drive up the price of sugar in the market. The sub-committee has recommended to PAC to instruct the Commission for the Investigation of Abuse of Authority (CIAA) to investigate into this “collusion” and take actions against the officials and sugar mills complicit in wrongdoing. The suspected officials are found not to have implemented the agreement reached between the sugar mills and the government on September 6 to fix sugar price at Rs 63 per kg. Instead, Ministry of Industry, Commerce and Supplies fixed the price of sugar at Rs 70. Apparently, this was done in direct involvement of Minister for Industry, Commerce and Supplies, Matrika Yadav, though he has denied any kind of involvement. Minister Yadav should have worked for the welfare of the sugar cane farmers and the consumers. 

It is troubling that such collusion has been reported while Prime Minister K P Sharma Oli has been reaffirming his stance on zero-tolerance against corruption. We refuse to believe that his minister and the officials have started to disobey him. We also refuse to believe that Nepal’s sugar market has gone out of government control. The government can, and should, work to help the consumers by slashing the sugar price. Notably, the government, on September 17, on the request of Nepali sugar mills, had fixed sugar import quota for the current fiscal year at 100,000 tons. This was purportedly meant for protecting the Nepali sugar industry and providing domestic production an easy access to the market. But this move, together with the reported collusion of the officials, has resulted in the rise of sugar price as high Rs 80 per kg (grocery stores have been selling it for Rs 80 per kg, 10 rupees more than the price fixed by the government) from Rs 60 per kg. This is a blatant disregard to the welfare of the consumers who are already at the receiving end of inflation. It must be fixed immediately.

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