January 19, 2023 | Investopaper
The Ministry of Agriculture and Livestock Development has proposed a minimum support price of Rs 540 per quintal and transportation fee of Rs 70 for sugarcane. The government will subsidize the cost of transportation.
The ministry has stated that sugarcane price has been fixed by adding production cost, transportation, market price, and profit.
This is an increase of Rs 20 per quintal from last year. In the last fiscal year 2078/79, the support price of sugarcane was fixed at Rs 520 per quintal. Similarly, the subsidy for transportation was Rs. 70. This year, farmers will get Rs 610 per quintal including transportation.
In the fiscal year 2077/78, the price of sugarcane was fixed at Rs. 544.33 per quintal.
Farmers are not happy even though the government has increased the support price. The Federation of Sugarcane Producers of Nepal had demanded to fix sugarcane prices at Rs 660 per quintal due to an increase in the production cost and Rs. 700 per quintal including transportation.
The attraction towards sugarcane farming is declining due to the lack of fair prices. Farmers are fleeing from this business as they do not get the proper cost of sugarcane and do not receive the sold amount from the industry on time. Sugarcane production has decreased by 20-25 percent every year for the last five years.
According to government data, the consumption of sugar in Nepal is 280,000 tons annually. Recently, the domestic production (when the industry is running at full capacity) is about 240,000 tons. Sugar is being imported in large quantities as local production cannot meet the demand.