Sugar mills in Tarai districts are receiving reduced quantities of sugarcane for crushing as farmers have cut back on plantations due to growing non-payment issues.

Kapil Muni Mainali, president of the Federation of Sugarcane Producers Association, stated that Everest Sugar Mill in Sunsari crushed nearly 3.3 million quintals of cane this season, while Indu Shankar Sugar Mill in Sarlahi processed 3.1 million quintals.

Both mills crushed approximately the same quantity last season as well.

"Two to three years ago, both sugar mills used to crush around 6 million quintals of cane each season. However, as farmers have reduced sugarcane farming due to ongoing payment hassles, they have shifted to growing other crops such as paddy, wheat, and maize, which offer better returns than cane farming," Mainali said.

The decline in sugarcane farming continues yearly as farmers grow more pessimistic.

The government has struggled to set an appropriate sugarcane price, burdening farmers with debt. Farmers say that sugarcane farmers have repeatedly demanded that the government set a fair rate, considering the production costs of sugar.

Last November, the government fixed the minimum support price at Rs585 per quintal, a Rs20 increase from the previous year. However, farmers complain that sugar mills often fail to pay the government-mandated amount for their produce.

As the sugar mills have finished crushing the available cane, Mainali said they plan to shut down their factories before the Holi festival, which is celebrated in the Tarai this Friday. The mills will reopen in December for the next season.

In the past, sugar mills operated until May when sugarcane production was more abundant, farmers recalled.

According to the association, 9 kg of sugar is produced from crushing one quintal of cane.

Currently, 13 sugar mills operate in the country, including Indu Shankar Sugar Mill, Mahalaxmi Sugar Mill, and Annapurna Sugar Mill in Sarlahi.

Everest Sugar Mill operates in Mahottari, Himal Sugar Mill in Siraha, Eastern Sugar Mill in Sunsari, Reliance Sugar Mill in Bara, and Baba Baijunath Sugar Mill in Rautahat.

Similarly, Lumbini Sugar Mill, Bagmati Sugar Mill, Mahangkal Sugar Mill, and Bhageshwari Sugar Mill are located in Nawalparasi.

According to the Agriculture Ministry, Nepal produced 3.4 million tonnes of sugarcane in 2019-20, which declined to 3.18 million tonnes in 2020-21 and further to 3.15 million tonnes in 2021-22.

Shree Ram Sugar Mill shut down in July 2020 after failing to clear its dues to farmers.

Nepal used to produce 155,000 tonnes of sugar annually until a few years ago, but this has now dropped to 120,000 tonnes due to non-payment by sugar mill owners, according to the Salt Trading Corporation.

Nepal's annual sugar demand is around 270,000 tonnes, with the shortfall covered by imports.

Despite sugarcane being Nepal's largest commercial cash crop, non-payment issues have plagued farmers for decades. Farmers have criticised the government for setting the minimum support price without consulting them.

Beyond non-payment, farmers argue that the government's fixed rate does not benefit them, as fuel, labour, and fertiliser costs have surged. The lack of effective government policies has further discouraged sugarcane farming.

In response to farmers' complaints about insufficient payments from mill owners, the government introduced a cash subsidy scheme in 2018. In Nepal, sugarcane harvesting typically begins in mid-November.

The steady decline in sugarcane cultivation has contributed to increased sugar imports.

According to the Agriculture Ministry, the average Nepali consumes 4-6 kg of sugar annually. Of the total sugar produced in the country, 65 percent is used by households, while 35 percent is allocated for industrial purposes.

The ministry acknowledges that while sugarcane remains a key cash crop, production and market challenges persist.

There is significant potential for producing high-quality sugarcane by expanding commercial farming across the country, but a lack of adequate policies has hampered growth.