This year, the government has stopped the subsidy it has been giving to sugarcane farmers for 30 years due to lack of financial resources. Although the Ministry of Agriculture and Livestock Development has proposed to give 70 rupees per quintal like last year, the Ministry of Finance and the Office of the Prime Minister and Council of Ministers have informed that it cannot be given.

As in previous years, the Ministry of Agriculture had proposed a subsidy of Rs 70 per quintal this year. Although the support price was approved, the incentive subsidy given to the farmers was not approved by the Cabinet," said a senior official of the Ministry of Agriculture. "The Prime Minister and Cabinet Office and the Ministry of Finance did not seem ready to give the incentive subsidy to the farmers." This is the price that the sugarcane mill provides to the farmer. Even though the price of sugarcane has been increased by Rs 20 per quintal compared to last year, no decision has been taken regarding the subsidy being given to the farmers. In 2080/81, the government fixed the support price of sugarcane at Rs 565 per quintal. 

Farmers have received Rs 50 per quintal less than last year after government subsidies were withdrawn. "Even if the support price has increased by 20 rupees, it has been seen that without the incentive subsidy, it will be 50 rupees less per quintal than last year," the official said.

According to farmers, crushing of sugarcane takes place from the month of November. The crossing runs from February to March. Farmers are forced to sell sugarcane on credit every year because the government does not fix the support price on time. This year also the industry crossed the same price as last year. Kapil Muni Mainali, president of the Nepal Sugarcane Producers Federation, said that the sugarcane farmers suffering from the industry have been wronged by the government this year. 

Farmers have been receiving subsidies for about 30 years, claims Mainali, the president of the federation. Initially, subsidies were given in the name of farmers through industrialists on the basis of sales. The VAT amount was also refunded to the industrialist. Industrialists used to distribute subsidies to farmers. But after the auditor general's office raised questions saying that the industrialists were arbitrary in the distribution of subsidies, subsidies were given directly to the farmers' accounts. 

The joint secretary of the Ministry of Agriculture, Hari Bahadur KC, said that direct deposits have been made to farmers' accounts for about seven years. Two years ago, sugarcane per quintal was Rs 65.28 on crushing basis. Since then, Rs 70 per quintal has been given,” he said. Two years ago, about 1 billion rupees were spent annually for subsidies. KC said that now it costs about 1 billion 45 million. The subsidy amount varies according to the quantity of sugarcane produced by the farmers.

The mentality of the government is that no matter how much subsidy is given to the farmers, the common people will not get cheap sugar. Although the Ministry of Agriculture said that the subsidy should be increased, the Ministry of Industry and Finance did not agree. The incentive subsidy received from the government has been stopped," said Chairman Mainali, "There has been injustice from the government." Last year, the farmers received about one and a half billion subsidies, so this year they need the same subsidy.

Januka Pandit, spokeswoman of the Ministry of Agriculture and Livestock Development, has accepted that the subsidies for sugarcane farmers have been stopped. "Though a proposal has been sent to the Council of Ministers from Agriculture for the incentive subsidy, I have received information that the subsidy will not be given this year. Although agriculture sent a proposal, there was no decision," she said.

 Sugarcane is mainly cultivated in Sarlahi, Morang, Sirha, Dhanusha, Mahottari, Rautahat, Bara, Parsa, Nawalparasi, Kailali, Kanchanpur and other districts. However, farmers say that cultivation is decreasing recently. President Mainali says that about 22 million quintals of sugarcane were crushed this year. He said that 2.5 million tons of sugar was produced.

The government has not only removed the subsidy for sugarcane farmers, it has also reduced the customs duty on sugar, jaggery and sugar by 50 percent. Customs duty has been reduced from 30 percent to 15 percent through Economic Bill 2082. This, industrialists say, is the flourishing of imports and illegal markets rather than encouraging domestic industries.