BUTWAL, July 25: Sugarcane farmers in Nawalparasi (Bardaghat Susta West) are taking loans to meet daily expenses as sugar mills continue to delay payments for their produce. Two sugar mills in the district owe farmers more than Rs 275 million, leaving hundreds of growers in financial distress.
The government had announced that sugar mills must clear payments to farmers within 25 days of purchasing agricultural produce, warning of action against those failing to comply. The issue was also included in the government’s 100-point agenda for governance reform published in March 2026.
However, despite government directives to concerned authorities through district administrations, farmers in Nawalparasi have yet to receive millions of rupees owed for sugarcane crushed months ago.
Lumbini Sugar Industry Pvt Ltd based in Sunwal Municipality owes around Rs 200 million to farmers for sugarcane crushed this year, while Indira Sugar Mill owes around Rs 75 million for sugarcane purchased four years ago. The latter has remained closed for the past two years.
According to Umesh Chandra Yadav, spokesperson for the Federation of Sugarcane Producers’ Association Nepal and former chairperson of its Nawalparasi chapter, Indira Sugar Mill owes Rs 75 million and Lumbini Sugar Industry owes Rs 200 million to farmers.
“Farmers were compelled to sell sugarcane on credit, but the delayed payments have made it difficult for them to run their households,” Yadav said.
Farmers forced into debt
For many farmers, unpaid sugarcane dues have turned into a cycle of debt.
Bishwabandhu Yadav of Guthisuryapura in Pratappur Rural Municipality-7 said Lumbini Sugar Mill has not paid him around Rs 800,000 for sugarcane supplied this year. He said the mill has yet to clear payments for sugarcane crushed in February.
Similarly, farmer Gokul Koiri of Bairiya in Pratappur-6 said he has not received payment from Lumbini Sugar Mill even five months after supplying sugarcane. He is also waiting for Rs 70,000 owed by Indira Sugar Mill from three years ago.
Sugar mills fail to pay sugarcane farmers
“We have repeatedly visited the industries and even staged protests, but the mill owners have not paid us,” Koiri said.
Farmer Shiv Kumar Chaudhary of Jhulanipur said he has been forced to borrow money to pay land rent, purchase fertilizers, and manage household expenses.
“We leased land to grow sugarcane, but sugar mills never make payments on time,” he said.
Another farmer, Ramesh Koiri of Pratappur, said Lumbini Sugar Mill has not paid Rs 300,000 for sugarcane crushed in February. He also said Indira Sugar Mill has failed to clear Rs 3 million in dues from four to five years ago.
“I have suffered a lot. If someone else were in my situation, they might have died of a heart attack,” he said.
Mills cite financial problems
Kush Subedi, accounting officer at Lumbini Sugar Industry, said the company has been struggling to make payments due to difficulties in selling sugar.
He said the mill has already paid around 50 percent of the amount owed for sugarcane crushed this year and will clear the remaining dues after selling sugar stored in warehouses.
Lumbini Sugar Industry crushed 699,000 quintals of sugarcane this year.
Meanwhile, Indira Sugar Mill, located in Gangapur of Pratappur-8, has not paid farmers for sugarcane purchased four to five years ago. The mill has been closed for two years, and its operator Rakesh Agrawal has remained out of contact.
Nepal Mega Investment Bank has locked the mill’s premises, where a bank security guard has been deployed. Farmers had previously filed fraud cases against Agrawal, but locals said no significant action was taken.
Farmers seek government intervention
Nawalparasi Chief District Officer Deepak Raj Nepal said discussions were held between sugar mill operators and farmers around one and a half months ago, during which mill operators committed to clearing payments by the end of July.
He said discussions were also underway to file a fraud case against the operator of Indira Sugar Mill, who has been out of contact.
However, farmers have accused authorities of failing to take effective action despite repeated requests for help in recovering their payments.
Yadav said representatives of sugarcane farmers had approached the District Administration Office, the Ministry of Agriculture, Forest and Environment, and the Ministry of Industry, Commerce and Supplies in the third week of June, seeking initiatives to resolve the crisis.
“We have informed the ministries and district administration about the problem, but no effective steps have been taken,” he said.
There are three sugar mills in Nawalparasi: Lumbini Sugar Industry, Indira Sugar Mill, and Bagmati Khandsari Mill. According to Shyam Narayan Chaudhary, acting chairperson of the Federation of Sugarcane Producers Association Nawalparasi, Bagmati Sugar Mill has already cleared most of its payments and is settling the remaining dues.
Declining sugarcane production
Nawalparasi currently has sugarcane cultivation on around 7,500 hectares, producing approximately 2.2 to 2.4 million quintals of sugarcane annually.
The district, once Nepal’s second-largest sugarcane producer, has now slipped to fourth place due to declining production.
Farmers have increasingly abandoned sugarcane farming due to recurring payment delays, shortages of fertilizers, and a lack of improved seeds. The decline in sugarcane production has also affected domestic sugar output.
Nepal currently has an annual sugar demand of around 240,000 metric tons, while domestic production stands at around 180,000 metric tons.
Subsidy offers some relief
Despite payment problems from sugar mills, farmers received government subsidies for sugarcane on time this year.
Farmers received Rs 129.74 million in subsidies for sugarcane crushed by Bagmati Sugar Mill and Lumbini Sugar Industry.
The government provides a subsidy of Rs 70 per quintal of sugarcane. Yadav said timely disbursement of the subsidy provided some relief to farmers.
