The longstanding issue was resolved following a meeting between the sugar mill and the District Administration Office of Sarlahi. Hundreds of agitating sugarcane farmers had been constantly picketing the mill demanding the money owed to them.

Following the pact, both the parties have agreed to resume work within a week.

Gyan Prasad Bhattarai, executive director of the mill, said that they had pledged to settle the farmers’ dues by mid-February. He added that the mill would also issue purchase orders for the new crops in a fair and transparent manner.  Lawmaker Hari Upreti requested the mill not to give the farmers a raw deal as it was a question of their livelihood. “The concerns of the farmers are genuine, and the mill should fulfil their demands,” he said. “Cheating farmers constantly is not acceptable.”

Last month, the Office of the Prime Minister had directed the government not to refund the VAT provided to sugar mills until they pay the farmers.

The office had also told the government to form a committee consisting of the joint secretaries of the Industry, Agricultural Development, Finance and Commerce and Supplies ministries to fix the support price of sugarcane.

Fixing the price of sugarcane is a recurring issue. Every year during harvest time, sugarcane growers and sugar mills confront each other for a customary tug-of-war over fixing the price

of cane.

Last year too, sugar mills had delayed fixing cane prices. Farmers said that the delay in price fixation had forced them to sell their products on credit, and that they had not received payment for the last three months. The government had formed a talks team to resolve the issue, but it failed to determine prices even after several attempts.

On January 3, 2011, the local administration was forced to impose a daylong curfew on a 13-km stretch of the East-West Highway in Sarlahi district following a strike organized by farmers demanding fixation of cane prices. At least 40 police personnel were injured in clashes with the irate farmers.

Three weeks ago, the Cabinet had also directed the Ministry of Agricultural Development to declare sugarcane as a national crop in an effort to ease problems being faced by sugarcane producers.