Govt instructs sugar mills to provide lock-up money to sugarcane growers

KATHMANDU: It seems the government will take more time to fix the support price of sugarcane as it has instructed the sugar mills to provide lock-up money to cane growers and decided to form a panel to study the cost of production of sugar.

As the government-formed Sugarcane Support Price Fixation Committee failed to fix the support price despite many rounds of negotiations with sugarcane growers and sugar mill owners, the government has told the mills to provide lock-up money to the farmers and settle the accounts once the government fixes the support price based on the panel report.

The government has told the sugar mills to provide Rs 325 per quintal while purchasing sugarcane from the fields and Rs 350 per quintal at the factory gate as lock-up money, according to Shanta Raj Subedi, secretary of the Office of the Prime Minister and Council of Ministers (OPMCM).

Currently, sugarcane growers have been sending sugarcane free of cost to the sugar mills with the start of the crushing season. According to sugarcane growers, mid-December to mid-April is the peak time for sugarcane crushing.

“Mills must pay the lock-up money fixed by the government to the sugarcane growers,” said Subedi, adding, “The government will take a decision on the support price once it receives the panel report.”

The Ministry of Agricultural Development (MoAD) has already submitted the cost of production of sugarcane. As per MoAD, it costs Rs 315 to produce one quintal of sugarcane. The OPMCM had directed the Sugarcane Support Price Fixation Committee, led by the joint secretary of the Ministry of Industry (MoI), to fix the price by the end of December. However, the committee failed to do so as the cane growers and sugar mills remained firm with their demands.

Last year, the support price of sugarcane was set at Rs 476 per quintal and farmers are putting pressure for the price to be fixed at an amount which is not less than that of last year. There are a total of 11 sugar mills in operation across the country.

Sugarcane, a major cash crop, is being cultivated on 67,000 hectares of land across the country and its annual production stands at 2.96 million tonnes, according to MoAD.

Likewise, production of sugar last year was at around 165,000 tonnes worth Rs 14.26 billion. The annual demand for sugar in the country stands at around 213,000 tonnes, which is met through imports mainly from India and Brazil. Sugar mills are refusing to pay a high price for sugarcane citing the cheaper import rates of sugar.

Source: THT