Sugarcane floor price left unchanged at Rs536.56The government left the floor price of sugarcane unchanged for this fiscal year, but increased the subsidy given to sugarcane farmers, thus easing the burden on mill owners. On Thursday, the Cabinet approved the minimum farm gate price of Rs536.56 per quintal for this harvest season starting November.
The government left the floor price of sugarcane unchanged for this fiscal year, but increased the subsidy given to sugarcane farmers, thus easing the burden on mill owners. On Thursday, the Cabinet approved the minimum farm gate price of Rs536.56 per quintal for this harvest season starting November.
The price includes a government subsidy of Rs65.28 per quintal paid to sugarcane farmers. The subsidy was Rs60 per quintal last year. The government launched the subsidy to provide respite to sugarcane producers.
Government spokesperson Gokul Baskota said during its weekly press briefing that sugar mills would need to pay Rs471.28 per quintal to sugarcane farmers for their crops. “The mills are required to pay the farmers on time.” As per the Sugarcane Subsidy Guideline 2018, the Finance Ministry will release the subsidy amount to the Ministry of Agriculture and Livestock Development, said Baskota.
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. This year, it was delayed by a month. Farmers in key sugarcane producing areas criticised the government for the holdup as their standing crops were drying up in the fields.
Yubak Dhoj GC, secretary at the Ministry of Agriculture and Livestock Development, said they had recommended the price a month earlier. “We are not aware of further developments as the Industry and Finance ministries take it from there,” he said.
But the proposal was sent back. “We were asked to send the proposal again on Wednesday.” GC said that the floor price of sugarcane was based on the farmers’ production and transportation costs.
From last year, the government started fixing the floor price of sugarcane in a bid to end constant confrontation between sugarcane farmers and sugar producers. It had become a tradition for sugarcane growers and sugar mills to engage in a bitter dispute over the floor price during harvest time every year.
Before the government began setting the floor price, sugarcane prices in Nepal were normally based on the rates paid by Indian mills to their farmers. The government had announced in its budget statement for this fiscal year that it would fix the reference prices of key agricultural products to encourage farmers.
Even though the government has set the floor price of sugarcane, many sugar mills have not been paying the farmers on time citing their inability to sell their products. Moreover, a number of sugar mills have been paying the farmers less than the floor price fixed by the government.
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. There are 13 sugar mills operating across the country.