Uncertainty over sugarcane subsidy release

By Our Correspondent,Sarlahi, Apr. 13: Despite sugar mills making timely payments to sugarcane farmers this year, the subsidy amount promised by the government remains uncertain.

The Cabinet meeting held on November 28, 2024, fixed the price of sugarcane at Rs. 655 per quintal. Out of this, sugar mills were to pay Rs. 585, while the government was to provide Rs.70 as a subsidy.

Most sugar mills, which have already completed crushing for the current season and shut down, have cleared payments to farmers. 

However, according to Kapil Muni Mainali, President of the Nepal Sugarcane Producers’ Association, it is still uncertain whether or not the farmers will receive the government-promised subsidy. 

Mainali has complained that while sugar mills made prompt payments this year due to reduced sugarcane production and high competition in procurement, the government has repeated its old attitude while paying subsidies to the farmers. 

Even last year, farmers had received the subsidy in two instalments during the festival season, after the much delay.

Mainali said that the lack of clarity on whether the government will provide the promised subsidy has left farmers disappointed. 

“Due to low production, sugar mills competed to purchase sugarcane and paid promptly, but the government is still showing the same old attitude,” Mainali said. 

“Unless one pleads with the ministry, the subsidy money will not be released. This tendency has not changed,” he added. 

Mainali said that since the Ministry of Finance has not finalised the budget, it is still uncertain whether farmers will receive the subsidy. 

Leaders of sugarcane farmers are preparing to draw the attention of the Ministries of Agriculture and Finance regarding the subsidy in April last week. 

The Ministry of Finance is responsible for releasing the subsidy amount through the District Treasury Controller Office, Sarlahi, which then deposits the money into the farmers’ accounts. 

Chief of the Office, Pushpa Prasad Guragain said that although he had drawn the Ministry’s attention for the release of the subsidy, there is currently no possibility of immediate disbursement.

Even though he requested the ministry to release the funds within the current fiscal year, the ministry is unlikely to release the budget. 

“We asked them to transfer the amount by the end of this fiscal year to provide the amount, but it didn’t seem possible,” he said. 

“There is a tendency to disburse the sugarcane subsidy only after the start of the new fiscal year. The government is likely to follow the same trend this year too,” Guragain added. 

He said, he is currently in Kathmandu to advocate for the release of the subsidy, he also mentioned that local sugar mills have yet to submit the sugarcane crushing details to his office. 

He said that by the last week of April, the details of crushing and farmer information from all three sugar mills in the district would be collected and sent to the ministry.

There are three sugar mills in Sarlahi. Indu Shankar Sugar Mill in Hariwan has crushed 3,052,792 quintals of sugarcane, Mahalaxmi Sugar Mill in Bagdaha has crushed 1,380,104 quintals and Annapurna Sugar Mill in Dhankaul has crushed 921,000 quintals.