The government has fixed the minimum support price for this season’s sugarcane harvest at Rs620 per quintal, an increase of Rs35 from last year. Monday’s Cabinet meeting also set the subsidy for cane farmers at Rs70 per quintal.

On July 7, the Cabinet had slashed the subsidy to Rs35, cutting it by half from the previous Rs70. The then KP Sharma Oli administration said the decision was driven by pressure on the treasury.

The sugarcane subsidy was introduced in 2018 after farmers complained that mill owners were paying rates too low to cover rising production costs.

Sugarcane harvest in Nepal typically begins in mid-November. Although it is the country’s largest commercial cash crop, farmers say they continue to struggle with chronically delayed or unpaid dues.

Production has been falling steadily.

Nepal harvested 3.4 million tonnes of sugarcane in 2019-20, according to the agriculture ministry. The figure dropped to 3.18 million tonnes in 2020-21 and further to 3.15 million tonnes in 2021-22.

A few years ago, Nepal produced about 155,000 tonnes of sugar annually.

Salt Trading Corporation says output has now slumped to around 120,000 tonnes, largely because mill owners have failed to clear payments to growers, discouraging farmers from expanding cultivation.

Nepal needs around 270,000 tonnes of sugar a year, and imports make up the shortfall. Only nine sugar mills remain in operation, while five have closed.

The shrinking domestic output has made the country increasingly dependent on imported sugar.

According to the agriculture ministry, an average Nepali consumes 4 to 6 kilograms of sugar annually. Of the total domestic production, 65 percent goes to households and the remaining 35 percent to industrial use.