KATHMANDU, Dec 11: Sugar producers have warned to halt payments to sugarcane farmers if the government fails to check growing smuggling of sugar.
Organising a press meet on Tuesday, Nepal Sugar Producers’ Association (NSPA) said sugar mills are overstocked with sugar due to illegal cross-border trade of sugar. Shashi Kant Agrawal, president of the NSPA, informed that domestic sugar mills now have 5,000 tons of unsold sugar in stock.
Time and again, sugarcane farmers have been victims of both the government and the sugar mills due to the delay in payments of their dues. In addition, the farmers almost every year suffer from the government’s delay in fixing the minimum support price on time. This year, the government fixed the minimum price of sugarcane at Rs 585 per quintal just two weeks ago after the main harvesting season started.
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While sugar producers are found dilly dallying to clear the dues of the farmers on various pretexts, the government also delays clearing subsidy dues to the farmers. Even at present, sugarcane farmers have been struggling to get government announced subsidies worth more than Rs 1 billion for the sale of their products. The government provides subsidies of Rs 70 per quintal to the sugarcane farmers.
In the past couple of years, farmers have felt some respite due to timely payments by sugar mills. However, the sugar producers are now looking to victimize the farmers once again.
Agrawal said the sugar mills have been unable to sell their products in the domestic market due to illegal imports of sugar at cheaper price from neighboring countries. “As we will be adding this year’s produce on top of the unsold stock of last year, we will be unable to pay the sugarcane farmers,” he said.
There are a total of 13 sugar mills operating in the country. According to the NSPA, about half of the sugar factories have already started producing sugar from the third week of November.
There is a demand for 220,000 tons of sugar annually in the country. Last year, the domestic sugar mills produced a total of 178,000 tons of sugar. The NSPA has projected sugar production to go up by 20 percent this year.
The government imposes 30 percent customs duty on import of sugar. Citing the possible shortage of sugar during festivals, the government permitted public enterprises including the Salt Trading Corporation and the Food Management and Trading Company to import sugar by waiving 50 percent of the customs duty.
According to the NSPA, many importers have been involved in illegal imports due to high customs duty. “If the smuggling is not checked, both the sugar producers and sugarcane producing farmers will suffer,” Agrawal said.
