Sugarcane price fixed

SANGAM PRASAIN
KATHMANDU, JAN 04 -

After two weeks of agitation and Sunday’s violent protest, which forced the local administration to clamp curfew in Sarlahi on Monday, the agitating sugarcane farmers called off their agitation after reaching an agreement with sugar producers on Monday.

Sugar producers agreed to pay last year’s price of Rs 401 per quintal of sugarcane to the farmers after the government agreed to waive 70 percent of the Value Added Tax (VAT) levied on sugar products. However, Prime Minister Madhav Kumar

Nepal’s intervention was required to resolve the dispute between the sugarcane farmers and sugar producers.

A tripartite meeting held in the presence of the Prime Minister in the Capital on Monday fixed both the issues—farmers’ price demand and tax waiver demanded by sugar producers.

As per the Monday’s agreement, the government will waive 70 percent of the VAT imposed on sugar products. In return, sugar producers will provide the waived VAT amount, which stand at around Rs 40 per quintal, to the farmers.

In addition to this, sugar producers have also agreed to provide Rs 33 per quintal directly to the farmers as ‘Sugarcane Development Promotion’’. Earlier, they used to contribute this amount to Sugarcane Promotion Fund. “The amount of VAT that the government waived will go to the farmers now,” said Manish Agrawal, managing director of Lumbini Sugar Mill.

Sugar producers had been asking the government for the VAT waiver for long. And, VAT was one of the major issues why sugar producers were reluctant to pay the price demanded by the farmers. “We are going to resume our operation after signing an agreement to this effect on Tuesday,” said Agrawal.

Sugarcane farmers, for last two weeks, were demanding last year’s price for sugarcane, while sugarcane producers were reluctant to pay the price.

Each year, sugarcane farmers and sugar producers have been at variance over the sugarcane price. Following a five-month agitation last year, sugar mills of Sarlahi, Mahottari and Nawalparsi had agreed to purchase sugarcane at a minimum price of Rs 401 per quintal. Then, the farmers had demanded hike in sugarcane price following surge in sugarcane price in India. However, in the wake of sugar shortage last year, sugar mills had agreed to pay as high as Rs 570 per quintal to the farmers.

However, sugar producers fixed the sugarcane price at Rs 348 per quintal for this season, after the market price of sugar dropped to Rs 58 per kg from last year’s Rs 85 per kg. The sharp drop in sugar price, according to sugar producers, made them unable to pay last year’s price.

However, farmers refused to accept the price set by the sugar mills, saying that their production cost has gone up. “We are not ready to accept low price this year,” said Paramhansa Chaturbedi, president of Sugarcane Producers’ Association, Sarlahi, before the agreement on Monday.

Currently, sugarcane is grown in over 70,000 hectares of land in 17 districts of the country. Sarlahi, Mahottari and Nawalparashi districts are the main producers of sugarcane.

Farmers said sugarcane production had dropped from 30 million quintals per year to 10 million quintals per year in six years due to the low priority of the government to this sector.