Farmers forced to borrow as mill delays payment

- Binod Bhandari, BIRATNAGAR

Oct 20, 2017-

Sugarcane farmers in Morang and Sunsari were forced to borrow to manage expenses this festive season as the sugar mill failed to pay them for the raw material. The mill has been habitually cheating farmers and delaying payment in recent years.

The affected farmers continue to sell their sugarcane to the mill even though they have not received payment for last year’s produce. The mill’s outstanding dues to the farmers stands at Rs180 million.

“I have to borrow to manage my expenses for the festive season,” said Umesh Yadav, a local farmer of Barju Village Municipality. Yadav had sold sugarcane worth Rs500,000 to the mill. He said that farmers have to take loans to make costly investments in the sugarcane farming. “Even after selling the crop, we have to take loans to manage family expenses,” he said, adding such trend is common among farmers in Morang and Sunsari. Farmers said that most of their expenses occur during the festive season. The mill also creates payment problems at this time. 

Jit Bahadur Khadka, a farmer of Amduba, Sunsari, lamented that he was forced to take loans to celebrate both Dashain and Tihar festivals this year. “Our money has been stuck at the mill.” 

Nearly 5,000 farmers are involved in sugarcane farming in these two districts. Last year, they sold 828 tonnes of sugarcane worth Rs410 million to the mill. Of the total amount, the mill paid only Rs230 million to the farmers. Shailendra Raj Pandey, president of Morang-Sunsari Sugarcane Producers’ Association said majority of the farmers are in debt. While purchasing sugarcane, the mill owner had agreed to make full payment by the end of the fiscal year, according to Pandey.

“Farmers borrowed money from local money lenders, paying high interest rate to plant sugarcane,” he said. “But, the mill owner’s lackadaisical attitude has pushed the farmers into poverty.”   Farmers have been organizing protest frequently against the mill. 

However, most of the time, the mill has been making lofty promises to keep the protesters calm. “The mill has never kept its words,” said Kamal Prasad Kamat, secretary of Sugarcane Producers Struggle Committee. The trend of untimely payment by mills started since last five years and now it has become a habitual problem. The Eastern Sugar Mill is being operated by Golchha Organisation. Vishal Group has also become the shareholder of the company from this year. 

Sources said that Golchha has sold its shares to Vishal Group due to liquidity problem to run the mill. Both groups have begun the process of taking loan to pay the farmers debt, according to sources.  

Due to the recurring payment issue between the sugar and cane producers, mills are facing shortage of raw materials as most of the farmers have started to quit cane farming. Five years ago, farmers used to supply 2,700 tonnes of sugarcane to the mill. The consignment dropped to 1,807 tonnes in the previous year. It further dropped to 828 tonnes last year. 

Published: 20-10-2017 10:04

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