By Our Reporter

The government has abruptly halted the provision of providing subsidy to sugarcane farmers in the new budget.

The decision came as a big shock to thousands of sugarcane farmers across Nepal.

The farmers had been receiving the subsidy for more than 15 years, and lack of budget was cited for the halt.

The decision of the government to discontinue the subsidy has sparked widespread concern, particularly among farmers in the Tarai region who heavily rely on sugarcane as their livelihood.

The government started providing subsidies to sugarcane farmers in 2009 to promote sugarcane cultivation. After facing a problem in subsidy distribution, the government has been providing subsidies to farmers based on production since 2018 by formulating a procedure.

Media reports have it that the sugarcane farmers were disappointed by the government's decision to stop the subsidy to them.

Initially, subsidies were provided through industrialists, based on sales. The VAT amount was also refunded to the industrialists, who were then responsible for distributing the subsidies to the farmers, he said.

Farmers from key sugarcane-producing districts—including Morang, Sunsari, Bara, Parsa, Dhanusha, Siraha, Mahottari, Sarlahi, Nawalparasi, Kailali, and Kanchanpur were in Kathmandu in a last-ditch effort to persuade the government to reverse its decision.

However, their meetings with Minister for Agriculture and Livestock Development Ramnath Adhikari, Finance Minister Bishnu Prasad Paudel, and Minister for Industry, Commerce and Supplies Damodar Bhandari ended in disappointment.

In the current fiscal year 2024/25, around Rs 2.25 billion has been allocated to encourage farmers to promote sugarcane farming.

However, as there is no mention of this in the upcoming fiscal year's budget, not only the farmers are worried, there is also a risk of abandoning sugarcane farming.

Officials at the Ministry of Agriculture and Livestock Development also admitted that the government has stopped providing subsidies to sugarcane farmers.

Following the decision, the farmers have warned that the decision could have far-reaching consequences, including the closure of sugar mills.

About 11 sugar factories are directly dependent on sugarcane production. If farmers stop growing sugarcane, these factories will be shut down.