Kathmandu: Sugar mills in Nepal’s Tarai region are facing a decline in sugarcane supply as farmers reduce cultivation due to ongoing payment delays. Frustrated by non-payment from mills, many farmers have turned to growing other crops such as paddy, wheat, and maize, which offer better financial returns, reports The Kathmandu Post.
Kapil Muni Mainali, president of the Federation of Sugarcane Producers Association, reported that Everest Sugar Mill in Sunsari crushed around 3.3 million quintals of sugarcane this season, while Indu Shankar Sugar Mill in Sarlahi processed 3.1 million quintals. These figures are similar to last season’s output.
“A few years ago, these mills used to crush nearly 6 million quintals of cane each season. But as farmers face continuous payment issues, they are shifting to alternative crops,” said Mainali.
The decline in sugarcane farming has become a growing concern, with farmers expressing pessimism about its future. The government has struggled to set appropriate prices, leaving many farmers in debt. Repeated requests to establish a fair rate considering production costs have largely gone unheeded.
In November last year, the government set the minimum support price for sugarcane at Rs585 per quintal, a modest Rs20 increase from the previous year. However, farmers complain that mills often do not pay the government-mandated rate for their produce.
As available sugarcane stock runs out, mills are preparing to shut down operations before the Holi festival, celebrated in the Tarai this Friday. The mills are scheduled to reopen in December for the next crushing season. Farmers recall that in the past, sugar mills would operate until May when sugarcane production was more abundant.
According to the association, crushing one quintal of sugarcane yields about 9 kg of sugar. Nepal has 13 operational sugar mills, including Indu Shankar Sugar Mill, Mahalaxmi Sugar Mill, and Annapurna Sugar Mill in Sarlahi. Other mills include Everest Sugar Mill in Mahottari, Himal Sugar Mill in Siraha, Eastern Sugar Mill in Sunsari, Reliance Sugar Mill in Bara, and Baba Baijunath Sugar Mill in Rautahat. Additional mills such as Lumbini Sugar Mill, Bagmati Sugar Mill, Mahangkal Sugar Mill, and Bhageshwari Sugar Mill operate in Nawalparasi.
The Agriculture Ministry reports that Nepal’s sugarcane production has been steadily declining, dropping from 3.4 million tonnes in 2019-20 to 3.18 million tonnes in 2020-21 and further to 3.15 million tonnes in 2021-22. The situation worsened when Shree Ram Sugar Mill shut down in July 2020 after failing to clear its dues to farmers.
Until a few years ago, Nepal produced around 155,000 tonnes of sugar annually. This has now fallen to 120,000 tonnes due to financial struggles among sugar mill owners, according to the Salt Trading Corporation. With Nepal’s annual sugar demand at approximately 270,000 tonnes, the shortfall is met through imports.
Despite sugarcane being Nepal’s most significant commercial cash crop, non-payment issues have burdened farmers for decades. Many farmers have criticised the government for setting minimum support prices without consulting them. Rising costs of fuel, labour, and fertilisers have further strained farmers, and inadequate government policies have discouraged sugarcane cultivation.
In response to mounting complaints, the government introduced a cash subsidy scheme in 2018 to support farmers. In Nepal, the sugarcane harvest typically begins in mid-November, but reduced cultivation has contributed to increased sugar imports.
According to the Agriculture Ministry, the average Nepali consumes between 4 to 6 kg of sugar annually. Of the total sugar produced in Nepal, 65% is consumed by households, while the remaining 35% is used for industrial purposes.
While the ministry acknowledges sugarcane’s importance as a cash crop, challenges in production and pricing continue to hinder its growth. Experts say Nepal has the potential to boost sugarcane farming with better policies and incentives, but without meaningful interventions, farmers may continue shifting to alternative crops, further reducing domestic sugar production.
