Even after VAT rebate of Rs 5.28 a quintal, sugar mills offer farmers Rs 11 less

KATHMANDU Aug 11: Sugarcane farmers have criticized the government for slashing sugarcane price by reducing the VAT rebate that is paid to farmers. Changing the practice of paying VAT rebate through sugar mills, the government, through a cabinet decision last week, had decided to pay the farmers directly.

The VAT rebate for the mills has been slashed by Rs 5.28 to Rs 60 per quintal of sugarcane. With the rebate, the sugar mills will have to pay the farmers Rs 471 per quintal. But the mills have said that they will pay only Rs 465 per quintal, according to a farmer's union. 

Nepal Kishan Sangha, a wing of professional peasants associated with Nepali Congress, has said that the government decision last week has caused a loss of Rs 11 per quintal for them. The Sangha has demanded that the government should ensure that they get Rs 536 per quintal for the cash crop. 

Issuing a press statement on Friday, the Sangha has warned to begin a protest against the slashing of sugarcane price, which was set by the government earlier this year.

The government had decided to pay the VAT rebate directly to the farmers as sugar mills were not honest in making payments to the farmers. But the procedure of paying farmers directly has not yet been prepared. The government officials have said they would soon come out with the mode of paying the farmers. 

Despite several efforts made by the Minister for Industry, Commerce and Supplies Matrika Yadav for making sugar mills pay the dues to cane farmers, many sugar mills have not yet made payments. They have not even settled outstanding dues of previous years. 

Earlier, the government had hiked 15 percent customs tax on sugar import, making it 30 percent, to give a competitive edge to domestic sugar. This was in accordance to a demand of sugar mills. This made the sugar prices dearer in the domestic market, adding to the sugar mills' profits. But the increased revenues have not prompted the mills to clear farmers' dues. 

Sugar is one of the 12 prioritized projects that the government has planned to make self-dependent through the budget speech for this fiscal year. However, the government has failed to compel the sugar mills to make payments to the farmers. The government had fixed a price of Rs 536 per quintal of sugarcane for the last season that ended in mid-May.