Babu Lal Ray is in deep trouble. He has received a foreclosure notice from his bank saying he could lose his land if he does not repay a loan he took three years ago for his daughter's wedding. But Ray is broke because the sugar mill that owes him money hasn’t paid him.

Ray, a sugarcane farmer from Ramnagar in Sarlahi, had planned on paying off his Rs900,000 loan with the money that he received from Annapurna Sugar Mill for his crops. He has repaid Rs500,000 so far but the mill still owes him Rs275,000. Ray does not expect to be paid anytime soon.

“If I do not pay back the loan, the bank will seize 12 katthas of my land,” 67-year-old Ray told the Post.

Like Ray, many sugarcane farmers in Sarlahi have either received only small amounts or nothing at all from sugar mills.

The farmers should have received more than half of their dues by now, as per the five-point agreement reached on January 4 between sugarcane farmers and the Ministry of Industry, Commerce and Supplies. The ministry had assured the farmers that the sugar mills would be made to pay all outstanding dues by January 21. A week remains for the deadline and farmers have little hope that the mills will abide by the agreement or that the government will be able to compel the mills to pay farmers.

Rajesh Yadav, who came to Kathmandu in late December to protest non-payment of dues, said he had only received a small amount. Annapurna Sugar Mill owes Yadav Rs1.2 million, but he has received just Rs158,000. He is owed money by Annapurna and Mahalaxmi Sugar mills.

As per the agreement, the mills would have to clear 80 percent of dues by January 9, but this has not happened.

“I have no hopes that the mill owner will make their payment by the deadline,” said Yadav. “We have not received the subsidy provided by the government either. We will come to Kathmandu again if we do not receive payment and things do not go according to the agreement.”

According to Kapil Muni Mainali, president of the Nepal Sugarcane Producers Federation, farmers have yet to receive around Rs800 million out of the more than Rs1 billion that the mills owe them.

Mainali said that Annapurna Sugar Mill has only paid Rs200 million out of Rs500 million. Annapurna Sugar Mill and Indira Sugar Mill are both owned by Rakesh Agrawal, who, last year, had colluded with the payment committee to take Rs 40 million in subsidies that were meant for farmers, said Mainali. Both Annapurna and Indira are currently out of operation citing a lack of funds.

Shree Ram Sugar Mills is not in operation either while Lumbini Sugar Mills, whose owner recently died, has not made any payments yet, but the factory is in operation, Mainali said.

“We have no hopes that Annapurna, Shree Ram and Indira Sugar Mill will make their payments by the deadline,” Mainali said.

Mahalaxmi Sugar Mill, which owes Rs50 million to farmers, has come into operation after reaching an agreement with farmers to clear the dues.

There are three sugar mills in Sarlahi with 15,000 to 16,000 commercial sugarcane farmers. Around 4,000 sugarcane farmers are engaged by Annapurna Sugar Mill.

Yadav also said that sugar mills have been exploiting farmers by reducing the price of sugarcane by 15 percent.

Binod Khadka, information officer at the Department of Industry, said they have not received any written communication regarding the payments made by the sugar mills. “We have only received verbal updates from sugar mills on their payment status,” he said.

According to Dinesh Bhattarai, secretary at the Ministry of Industry, Commerce and Supplies, the ministry will initiate “administrative processes” if sugar mill owners fail to pay their dues by the deadline.

“However, we have not yet decided what these processes will be,” said Bhattarai.

Given the ordeals that they have had to go through just to receive the money that is their rightful due, farmers in Sarlahi say they are not keen on growing sugarcane any longer.

“We’ve opted for other cash crops,” said farmer Raudi Mahato.