Agrawal arrested for delaying payment to sugarcane farmers

  • The government doubled import duty on sugar and imposed quantitative restriction to promote domestic sugar, but mill operators did not clear dues to farmers

Kathmandu, October 31

Police today arrested Industrialist Rakesh Agrawal, proprietor of Nawalparasi-based Indira Sugar and Agro Limited and Sarlahi-based Annapurna Sugar and General Industries, on the charge of deliberately withholding payment of over Rs 470 million to farmers who had supplied sugarcane to the two sugar mills.

Kathmandu Police Range arrested Agrawal from his residence at Tripureswor as instructed by Nepal Police Headquarters. The Ministry of Home Affairs, as per the recommendation made by the Ministry of Industry, Commerce and Supplies and the Ministry of Agriculture, Land Management and Cooperative, had directed Nepal Police

to arrest Agrawal for not clearing the dues owed to sugarcane farmers for long.

Basanta Lama, chief of Kathmandu Police Range, informed The Himalayan Times that the two sugar mills owned by Agrawal had not released more than Rs 472.5 million in payment to sugarcane farmers. Annapurna Sugar and General Industries is yet to clear dues worth Rs 386.8 million and Indira Sugar and Agro Limited owes Rs 85.89 million to cane farmers.

“We are planning to hand over cases related to Agrawal to the district administration offices of Nawalparasi and Sarlahi,” said Lama.

The government has lately started taking stringent action against sugar mill operators who withhold payment to sugarcane farmers. The move came after the government doubled the import duty on sugar to 30 per cent and imposed quantitative restriction on import of comparatively cheaper foreign sugar. These measures were taken to promote the domestic sugar industry. Despite these, sugar mill operators have failed to clear dues owed to farmers.

There are 12 sugar mills operating in the country. These mills owe more than Rs 600 million to cane farmers, according to Nepal Sugarcane Producers’ Association.

“Annapurna Sugar Mill has not cleared dues owed to most of the farmers,” NSPA President Kapil Muni Mainali said. “The mill owner is not in contact with farmers either.” Representatives of Nepal Sugar Mills Association, who had expressed commitment to release all due payments before Dashain, were not available for comments.

The annual demand of sugar in the country hovers at around 350,000 tonnes, of which 200,000 tonnes is produced here and the remaining is imported. Some time ago, the supply of foreign sugar had gone up in the country following sharp drop in international sugar prices.

This had posed a challenge to domestic sugar producers, who could not compete with cheap imports due to high production cost. As a result, inventory of sugar in domestic mills had gone up. The government had then raised import duty on sugar and put a threshold on import to prevent domestic sugar mills from going bankrupt, which could have also affected sugarcane farmers. But sugar mill operators expressed reluctance to clear dues even after clearing their stock.

“Farmers must be paid on time. The government will not tolerate high-handedness of sugar mill owners,” said MoICS Joint-secretary Naba Raj Dhakal.