Sugarcane farmers in Garuda Municipality have launched a protest against the move to auction Shree Ram Sugar Mills, the oldest mill in Rautahat.

Sri Ram Sugar Mills Limited was incorporated in 1992. The company was initially promoted by the Golchha group.

A team from Nepal Bank Limited visited the mill on Tuesday to observe the machinery and other equipment after the mill was put up for auction.

The bank’s officials were surrounded by farmers who demanded to cancel the auction.

They have demanded to bring the plant into operation. The police, however, settled the dispute by bringing both parties to the table for a discussion.

The bank auctioned the sugar mill after it failed to pay back their loans.

According to the police, the team from the bank were not allowed to enter the mill by the sugarcane farmers.

The mill was put up for auction by Nepal Bank a month ago.

Yagya Murti Batsyal, manager of the debt collection department at Nepal Bank, said they were deployed by the headquarters to take stock of the mill’s condition, including its machines and parts to complete the auction process.

"But sugarcane farmers did not allow us to enter the factory," he said.

Ashok Yadav, coordinator of the Mill Protect Struggle Committee, said hundreds of farmers picketed the mill as soon as they were informed about the arrival of officials from the bank.

"Even though the bank has auctioned the assets of the mill, we will not allow them to take a single piece of machine from the mill,” said Yadav. “We will not sell the machines at the trash rate,” he said.

The Sugarcane Producers Association has been demanding to operate the mill and to cancel the auction.

A group of farmers visits the mill to keep an eye on it every day.

A few days ago, led by the association, sugarcane farmers from the district submitted a memorandum to the District Administrative Office demanding the cancellation of the auction. Farmers say that the auction was being carried out without a proper valuation of the property.

The mill was closed in July 2020. Farmers have been raising their voices to resume the operation of the mill since it was closed. The management closed the mill citing massive losses.

The mill had said they were not able to provide workers with the minimum basic salary due to the financial crisis.

Yadav said that Shree Ram Sugar Mill had operated for 26 years. The shutdown affected 325 workers.

The mill was established in 1992 and started crushing sugarcane in 1994. The sugarcane association said that when the mill was established, there were 12,000 sugarcane farmers in the district. After the closure of the mill, the number plunged to 7,000.

The mill had a capacity of crushing 3,000 tonnes of sugarcane per day. Sustained losses and a liquidity crunch resulted in delayed payments to farmers.

Last year, in coordination with Rameshower Ray Yadav, the then chairman of the Labour Interest Consumers and Industries Committee of the Federal Parliament, Sarita Kumari Giri, Umashankar Argaria and other lawmakers visited Rautahat to check on the condition of the mill.

The team returned after meeting with farmers, the employee union, labour union and others. After the meeting, farmers were hopeful that the mill would be operational.

"We thought that the mill would resume operations," said farmer Ram Ekbal Sah of Harsaha. But the management closed the mill and put it up for auction, he said. “We have been protesting for its resumption now,” said Sah.