Sugarcane farmers are back in the Capital as Oli administration broke its promiseThe government failed to make sugar mills pay the farmers their dues despite an agreement. They saw no option and came to Kathmandu to protest demanding payments.
“Annapurna Sugar Mill and Mahalaxmi Sugar Mill owe me Rs400,000 for the sugarcane I sold them three years ago,” he said. “I have a loan of more than Rs500,000 which I took two years ago.”
The small group of 50 that began its protests in Kathmandu on Sunday will soon be joined by others like Maya Shankar Yadav of Ramnagar Rural Municipality, Sarlahi. Dhankaul Sugar Mill owes him Rs800,000 for the sugarcane he sold them over the past four years.
“My family survives from sugarcane farming and with the income I manage daily expenses and children’s education. I do not have any other job. But it is difficult to manage when the mill does not make payments on time,” he told the Post from his home. “I have been managing household and other expenses borrowing from friends.”
He does not know where he will take the sugarcane ready for harvest in his 20-bigha (or 2.67 hectares) farm this year to sell.
“We will have to sell the sugarcane to the same mill that has not cleared previous dues,” he said.
The protesters want the implementation of the five-point agreement sugarcane producers reached with the government in January where the former had committed to paying up the dues within three weeks.
“Unless we get our payment and arrangements for seeds and fertilisers are made, we will not leave Kathmandu,” said Rakesh Mishra, patron of the Sugarcane Farmer Struggle Committee. “The agreement made by the government in writing did not come into implementation, compelling us to come to the Capital at the time of harvest.”
Sugarcane farmers had withdrawn their indefinite protest following the government’s assurance that the state would get the defaulting sugar mills to pay their outstanding dues by January 21. But only a few farmers were paid.
Mills do not say that they will not pay when talks are held with farmers but they always fail to work as promised, Maya Shankar Yadav said.
Sugarcane is harvested in winter and the protests come days after the government increased the minimum support price of sugarcane to Rs544.33 per quintal, the rate at which sugar mills buy the cash crop from farmers, for the 2020-21 crop harvest.
This is an increase by Rs7.77 per quintal to last year’s price which had not been increased for two consecutive years.
The new minimum support price, announced on Thursday, includes a government subsidy of Rs65.28 per quintal and this subsidy amounts to 90 percent of the value added tax levied on the sugar sales at current prices by sugar mills.
But sugarcane farmers are not happy with the price. The minimum support price is comparatively less than the expenses incurred, according to them.
“The new minimum support price of sugarcane announced by the government is against our cost of production and the rate is not acceptable to us,” said Kapil Muni Mainali, president of the Federation of Sugarcane Producers’ Association.
The price recommended by the Ministry of Agriculture and Livestock Development was approved by the Cabinet meeting on Thursday, according to Minister of Industry, Commerce and Supplies Lekh Raj Bhatta.
As sugarcane is categorised as an industrial product, the industry minister tables the proposal at the Cabinet based on the Agriculture Ministry’s recommendation.
Minister Bhatta told the Post that the minimum support price has been fixed taking into account all factors, including the cost of production, and is in the interest of farmers.
According to the Ministry of Industry, Commerce and Supplies, the breakdown of the new price is Rs386.16 for production and Rs92.89 for transportation, leaving the farmers a profit of Rs65.28 per quintal, which is the subsidy amount given by the government.
“We have set the price in the view of Indian sugarcane rates as higher or lower prices will promote illegal cross-border trade,” Bhatta said.
The minimum support price of sugarcane in India was fixed in August at IRs285 per quintal or (Rs456 per quintal).
“The minimum support price has been decided and I don’t see further revision on it,” said Bhatta.
In mid-November, when the government was preparing to announce the minimum support price of sugarcane, sugar producers had proposed a three-tier pricing system to the Ministry of Agriculture and Livestock Development.
Sugar producers proposed setting the price of high-quality sugarcane at Rs546 per quintal, medium quality at Rs536 per quintal and low quality at Rs526, arguing that it will encourage farmers to produce quality sugarcane benefitting both sugar and sugarcane producers.
But the ministry proposed one price for all kinds of sugarcane citing that it would be difficult to separate different grades of sugarcane in the absence of a quality checking mechanism in the country.
Besides, sugarcane farmers do not have access to quality seeds as they are struggling to produce sugarcane with piling dues yet to be paid and the government failing to provide the value of production every time while setting the minimum support price.
“We have asked to set the price Rs600 to Rs650 but it didn't happen,” Mainali said.
Rajesh Yadav, another farmer from Sarlahi, said sugar mills used to pay for the sugarcane amount including subsidy amount at once after selling the sugar they produced but they do not get the subsidy amount easily. Sugarcane farmers are facing hassless as they need to produce their land deeds and recommendation from the district administration office to get subsidy amounts.
With mills not paying them as per the January agreement, sugarcane farmers had been planning to come to Kathmandu to protest in March but due to the coronavirus pandemic and lockdown their plans got postponed.
Urmila KC, spokesperson for the Ministry of Industry, Commerce and Supplies, said that a meeting was held on November 24 where Minister Bhatta had instructed sugar mill owners to clear the outstanding dues owed to farmers.
The ministry has been working on behalf of the farmers by trying to recover their dues by halting the transaction of mills as well as recommending that the Ministry of Home Affairs take action for non-payment of the dues, she said.
According to the ministry, Shree Ram Sugar Mill owes farmers Rs260 million, Indira Sugar Mill around Rs40 million, Lumbini Rs80 million and Annapurna Sugar Mill Rs170 million.
Shree Ram Sugar Mill, which has been shut down, has said it will make the payments after selling its land and for this it is in negotiation with the Ministry of Land Management, Cooperatives and Poverty Alleviation, KC said.
According to the Federation of Sugarcane Producers’ Association, till the end of December last year, Annapurna Sugar Mills owed Rs500 million in dues to farmers that had been piling up for four years.
Similarly, Shree Ram Sugar Mills had outstanding dues worth Rs420 million, Mahalaxmi Sugar Mill Rs200 to Rs 210 million and three sugar mills in Nawalparasi had to release Rs200 million to the farmers, according to the federation.
Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry said it has not held any official discussion regarding the issue and therefore has no official view on it.
Sugarcane is a major cash crop in Nepal. It is cultivated on 71,625 hectares with annual production standing at 3.55 million tonnes.
But that acreage may decrease if others follow farmers like Rajesh Yadav who has been growing sugarcane for the last 30 years.
With the non-payment of his dues, Yadav has shifted to maize farming on some of his land.
“This has been helping me manage my family’s daily expenses somehow,” he said.