Reliance Sugar Mill of Manaharwa, Bara has not paid sugarcane farmers for their crops despite a government order to settle their dues. The cane growers said the mill owed them Rs500 million, and that they had not received their money for the last five months.  

The Home Ministry recently ordered sugar mills who have not been paying the cane farmers regularly to prepare a reliable payment plan as the outstanding debts have been piling up. 

The ministry issued a notice through the District Administration Offices to settle the debts as soon as possible. The ministry took action after farmers complained that they depend on the payment from the sugar mills to feed their families. 

Following the government order, Everest Sugar Mill in Mahottari promised to gradually clear the outstanding dues by mid-September. “Reliance Sugar Mill has not heeded the government orders. It has not paid us for the last five months,” said Asharfi Raut, president of the Sugarcane Producers’ Farmers Association.  

According to him, the mill crushed 2.91 million quintals of sugarcane supplied by farmers in Bara and Parsa this year. The sugarcane was produced on 10,000 bighas of land. 

The mill management said that it had not deliberately stopped payment. “As we have not been able to sell the sugar, we cannot pay the farmers,” said Raju Gadiya, manager of Reliance Sugar Mill. He said that banks had also stopped providing credit to sugar mills. “We have already withdrawn Rs1.20 billion in loans.” 

Gadiya said that domestic sugar mills were not able to compete with cheaper imported sugar. Mills have been forced to sell their products at Rs63 per kg this year as against Rs74 per kg last year. “If we survive, the farmers will survive,” he said, adding that they had not been able to sell the molasses, a by-product of making sugar, either. 

Last April, the government raised the import duty on sugar from 15 to 30 percent in a bid to protect domestic sugar producers. “However, the hike is still not enough. The import duty should be raised to 60 percent,” said Gadiya.

Nepal imported 83,875.7 tonnes of sugar worth Rs4.7 billion via the Inland Clearance Depot (ICD) in Birgunj between mid-July and mid-April, according to ICD Birgunj data. The country imported 38,643.5 tonnes of sugar worth Rs2.6 billion through the ICD in the same period a year ago.

Most of the imported sugar came from Pakistan. Sugar imports from Bangladesh and Canada also rose during the nine-month period. According to the latest statistics of the Agriculture Ministry, domestic sugarcane production is projected to increase 10 percent to 3.55 million tonnes this fiscal year. Sugarcane is cultivated on 78,609 hectares of land in Nepal.