Sugarcane farmers will now receive a subsidy of Rs60 per quintal, according to the provision put forth by the Cabinet which met last Friday. The move is expected to provide some respite to sugarcane producers who are facing late payments from sugar mills yet again.

For this year, the government has set the floor price of sugarcane at Rs536.56 per quintal, according to which the sugar mills are supposed to pay the farmers with the prescribed amount. With the new provision in effect, farmers will be receiving an additional Rs60 per quintal from the government.

Binod Bahadur Kunwar, spokesperson of Office of the Prime Minister and Council of Ministers, said the government with an aim of making the sugar production business self reliant had come up with the provision. According to him, the Cabinet decided to implement the provision from last May 29.

The government with enforcing the provision has also targeted to provide financial respite to sugarcane producers who are experiencing delayed payments from sugar mills once again.

Despite the government setting the support price of sugarcane, many industrialists on pretext of their inability to sell sugar, have been reluctant to settle dues of the farmers on time.

In addition, a number of sugar mills have been paying farmers a lower amount than the floor price fixed by the government. According to farmers, sugar mills have been paying them as low as Rs465 per quintal against the government’s fixed rate of Rs536.56 per quintal.

Narendra Yadav, a farmer from Parasi who sold his product to Bagmati Khadsari Sugar Mill, said the factory had reduced payments on the farmers’ produce by Rs70.64 per quintal. “Showing the cause that the government through this year’s budget annulled the VAT amount refund which was being provided to the sugar mills previously, the factory has reduced payments to farmers,” Yadav said. “Although the factories are supposed to pay the VAT, they are making the farmers suffer by reducing the payment amount for their sugarcane.”

Despite the government’s firm notice to take action against sugar mills that do not clear farmers’ dues

on time, cane farmers are still facing the same situation with sugar mills that repeatedly delay payments year after year Last June, Minister for Industry, Commerce and Supplies Matrika Yadav warned mill owners that they faced arrest if they did not pay cane growers on time. Sugar factories still owe billions of rupees to farmers.

Sugar producers are not heeding the government’s call to settle farmers’ dues and are instead threatening the government that no sugarcane will be bought in the upcoming season. Sugar mills claim that an excess supply of sugar combined with cheap imported sugar have resulted in massive piles of unsold stock.

There are currently 13 sugar mills operating across the country. According to the Sugar Producers Association, the mills have a combined stock of 124,000 tonnes of sugar worth Rs10 billion in their warehouses.