Farmers, sugar mills continue bickering over sugarcane price

Published On: January 6, 2019 09:27 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 6: Farmers are delighted with the sugarcane floor price announced by the government, whereas sugar mill operators have continued protesting the government rates.

“We are very happy with the government announcement of floor price at Rs 536.56 per quintal," said Kapil Mani Mainali, president of Nepal Sugarcane Producers Federation (NSPF).

"However, we have serious doubts whether the government's commitment is implemented or not," he added. "We are concerned with the inconvenience that the farmers have to face to claim the financial subsidy given by the government."

The floor price of sugarcane, as announced by the government, is the same as last year, in which Rs 65.28 will be subsidy provided by the government and Rs 471.28 will be paid by the sugar mills. Last year, the government provided subsidy of Rs 60 per quintal. 

The price announced by the government is in accordance to the Sugarcane Subsidy Guideline 2018.

Sugar mill operators have been unhappy about the fixing of sugarcane floor price by the government. Sashi Agrawal of Nepal Sugar Producers Association said: “The government increased our cost for cane processing when we were expecting cane price to decrease by Rs 50.” According to him, the price hike is due to the addition of land charges incurred by the farmers, which goes against the trend. 

He further mentioned that out of the 13 sugar mills within the country, only two -- Kageshwori Sugar Mill and Mahakali Sugar Mills -- were in operation as they have been able to get canes for Rs 380. He said the remaining mills would come into operation after negotiation with the government over the sugarcane prices. He also raised concerns that the difference in prices would create two different market prices in the country leading to unhealthy competitive advantages to mills.

On the other hand, Mainali said: “The sugar mill operators in the region of Kanchanpur were buying canes for Rs 380 per quintal, not following the government floor prices. Farmers are compelled to sell them at a lower price than the government floor price, as their canes would dry up if they hadn't sold them.” 

Meanwhile, NSPF has presented a memorandum to the government to increase the tariff placed on processed sugar from the international market and also remove the bureaucratic 'red tape' that the farmers faced while getting their subsidy amount.

The government owes Rs 1.28 billion to farmers as subsidy amount, of which only Rs 920 million has been disbursed to the concerned districts. According to Mainali, “The official red tape is hindering the farmers from getting the government subsidy.”

However, Agrawal persisted that the subsidy issue is arising as a result of higher and unreasonable prices announced by the government last year.

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