Sugarcane farmers still await payments, government subsidy

Published On: November 10, 2019 10:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 10: Sugarcane farmers have complained that they are yet to receive large amounts in outstanding payment from both the government and sugar mills. Even those who have received payments have complained of being paid less than the amount fixed by the government.

Sugarcane producers said sugar factories are yet to clear outstanding bills of Rs 1 billion out of last years' harvest, while the new harvesting season is round the corner. Nepali farmers start sugarcane harvesting from November end every year.

According to them, they have also not received the government subsidies totaling Rs 1.55 billion, out of which Rs 30 million is the unpaid amount of the last fiscal year. The government provides a subsidy of Rs 65 per quintal to sugarcane farmers.

Kapil Muni Mainali, president of Nepal Sugarcane Producers' Association, said the farmers have been left to live in financial crisis from the subdued move of both the sugar producers and the government. “Under the pretext of large stock of sugar left unsold, the sugar mills have dillydallied in clearing the dues of the farmers,” Mainali said.

There are 13 sugar mills operating across the country. Last year, the government had directed the sugar mills to pay the sugarcane farmers on time.

For over a year, the government has been imposing quota of 100,000 tonnes on sugar import, targeting to relieve the domestic sugar producers from being priced out of the market by cheap imports. However, sugar mills are still complaining that they are unable to sell their products in the domestic market, claiming that it disables them to make payment to farmers.

Farmers have also complained that a number of sugar mills of late have been denying to pay the floor price fixed by the government. Last December, the government had fixed minimum farm gate price of sugarcane at Rs 536.56 per quintal.

“Four sugar factories including Shreeram Sugar Mills in Rautahat, have refused to pay farmers with the government fixed rate,” Mainali said. “Instead the sugar mills have threatened the farmers to close the factories.”

The floor price is the minimum price farmers get for their crops, and it is normally announced before the harvest on the basis of the recommendations of the Ministry of Agriculture and Livestock Development. Last year, the government delayed the announcement almost by a month. For that reason, many farmers complained that they sustained financial losses as their standing crops dried up in the fields.

Mainali also criticized the government for the delay in farmers' payments. “Instead of releasing the subsidy money on time, the government has been lingering by repeatedly revising the working guideline on providing the subsidies to the farmers,” said Mainali.

Mainali said the government has recently revised the guidelines on the modality of payment, which has made the payment procedures of the subsidy even more complicated than before. According to him, in the new rule, farmers need to register their production area first with the government authority to be eligible to receive the subsidy provided by the government.

As of now, the government has been providing subsidy based on the survey report of the sugarcane plantation done by the farmers.

Mainali said the new rule is not practicable as it involves lot of official paper works which the farmers are unable to carry out themselves. “In addition, the government is making payment through the bank account of the concerned sugar mills, which gives more room to the sugar mills for manipulating the farmers” he said.

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