Sugar producers have proposed a three-tier pricing system for sugarcane according to the quality as the government prepares to announce the minimum support price of the product for this harvest season starting November.

Last week, sugar producers had proposed the Ministry of Agriculture and Livestock Development to set the price of high-quality sugarcane at Rs546 per quintal, medium quality at Rs536 and low-quality at Rs526.

Sugar producers said that the tier system will encourage farmers to produce quality products.

“The three-tier pricing system will motivate farmers to produce high-quality sugarcane. This will benefit sugar producers as high quality ensures higher quantity,” said Shashi Kant Agrawal, president of Sugar Producers Association.

Sugarcane is a major cash crop in Nepal. It is cultivated on 71,625 hectares with annual production standing at 3.55 million tonnes.

Normally, crushing 100 kg of sugarcane will produce 9 kg of sugar. But crushing 100 kg of high-quality sugarcane produces 10 kg of sugar, said Agrawal.

“The high-quality sugarcane benefits both sugar and sugarcane producers,” he said.

Sugarcane producers have been requesting sugar producers to hold discussions with them as well before proposing the three-tier pricing system.

“Like in the past, sugar producers have not consulted them with the pricing system although they would not oppose the proposal as it would benefit both sugar and sugarcane producers,” said Kapil Muni Mainali, president of Federation of Sugarcane Producers Association.

“We have not been informed about the proposed rates,” he told the Post.

According to Mainali, most of the sugarcane produced in the country is of medium quality.

“For the production of high-quality sugarcane, farmers need quality seeds,” said Mainali, adding that farmers do not have access to quality seeds. “The sugar producers can provide quality seeds for farmers for better production.”

In the last fiscal year 2019-20, the government announced the floor price of sugarcane at Rs536.56 per quintal.

The price included a government subsidy of Rs65.28 per quintal paid to sugarcane farmers. The government launched the subsidy to provide respite to sugarcane producers. The floor price is the minimum price farmers get for their crops, and it is normally announced before the harvest based on the recommendations of the Ministry of Agriculture and Livestock Development.

The government had also fixed the sugar price at Rs62 per kg last year based on the price set for sugarcane. “But consumers were compelled to buy sugar at Rs90 per kg but sugarcane prices remained the same,” said Mainali.

“This entails that farmers are not getting the price of cane according to the price the sugar sold in the market. The government is favouring the mill owners every time and is not interested in listening to the plight of farmers,” he said.

The Ministry of Industry, Commerce and Supply said it is yet to receive the new price for sugarcane from the Ministry of Agriculture and Livestock Development.

Urmila KC, undersecretary at the Industry Ministry, said that as soon as the agriculture ministry sends the proposed minimum support price for sugarcane, they would table it at the Cabinet for the approval of the new rates for this year’s harvest.

From 2018, the government had started fixing the floor price of sugarcane in a bid to end the 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. 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, several sugar mills have been paying farmers less than the floor price fixed by the government.

According to sugarcane farmers, untimely payments by the sugar mills and difficulties in getting quality seeds and fertilizer have forced farmers to switch to other crops.

“As a result of that, sugarcane production has declined by 40 percent this year compared to last year’s output,” Mainali told the Post. “The sugarcane production is declining annually,” he added.