Raising customs tariff can be one of the options to protect both the farmers and the sugar mills owners

Sugar mills in the country have been hit hard due to cheaper imported sugar in the local market. They have failed to compete with cheaper imported sugar which is sold for around Rs 60 per kg compared to Rs 72 per kg of sugar produced by the domestic sugar mills. There are a total of 13 sugar mills in the country and they are running at about 40 per cent capacity. These sugar mills produce 175,000 metric tonnes of sugar whereas the domestic demand stands at 220,000 metric tonnes per annum. The Ministry of Agriculture Development (MoAD) has estimated that sugarcane is cultivated in 67,000 hectares of land. Thousands of farmers are dependent on the sugarcane business, the future of which is unsure largely because of the government’s inconsistent policy. Thought it has been three years after the government brought together the cane farmers and sugar mill owners to fix support price Rs 531.20 per quintal of sugarcane last year — to safeguard the interest of cane farmers, it has done little to safeguard the domestic industry. The domestic sugar mills are at loss due to global fall in price of sugar. The domestic sugar mills have outstanding dues to farmers as their stock has remained in warehouses due to fall in price of sugar.

At present, customs tariff for imported sugar is 15 percent; 50 percent less than three years ago. It is the reason that sugar produced domestically has become more expensive (Rs 72 per kg) than that of the imported sugar (Rs 60 per kg.). The government had to reduce the customs tariff on sugar as the domestic production was very low because of low production of cane. Domestic production of sugar increased only after the government and the sugar mill owners agreed to fix support price for cane before plantation. Sugarcane farmers are happy with the fixation of support price system. But the sugar mill owners are at the receiving end following the import of cheaper sugar. This is the issue the MoAD wants to address by raising customs tariff on imported sugar. But the customs tariff cannot be raised exceeding the WTO rules.

The MoAD wants to make the country self-reliant in sugar production by introducing safeguard measures to farmers and mills owners. Fixing the support price for sugarcane before the plantation is one of the measures taken by the government. Even in a free market economy, the government can impose customs duty at certain level to safeguard the domestic industry. India also raised tariff by 50 percent through federal budget in July last year to protect its sugar mills and cane growers. Nepal can also apply a

similar measure to safeguard interests of the farmers and mill owners who have made huge investment in this sector. Raising customs tariff can be one of the options to protect both the farmers and the mill owners. There are other areas where the government can give incentives and subsidies to the farmers. Apart from fixing the support price, the government also should give subsidy on seeds and fertilisers; make appropriate provision of irrigation; provide loans to farmers at low interest rate and insure their produce against damage.

Healthy move

All health care facilities — four primary health posts and 41 health posts — in Makawanpur have been handed over to local units. The District Public Health Office handed over these 45 health facilities to local units on different dates. This is in line with what has been outlined in Schedule 8 (9) of the constitution. Basic health and sanitation has been included in the list of local level power in the constitution. Local Governance Operations Act 2017 also says local units will formulate policies on basic health and sanitation and regulate health care facilities. The Act has also vested power in the local levels to operate/run hospitals and other health facilities; develop health infrastructure; and work on control and mange malnutrition in women and children, among others.

In this context, handing over of health facilities to local levels also comes as part of implementation of the constitutional provision and federalism. Handing over of health facilities to local units now should result in strong health care system at the local level. Local levels now should work to strengthen health institutions so as to ensure quality health care services to people at an affordable cost.