“During a meeting held at the Prime Minister´s Office (PMO), sugar mills agreed to purchase sugarcane from farmers at Rs 401 quintals at par with the price offered last year after Prime Minister Madhav Kumar Nepal announced 70 percent VAT exemption on sugar,” said Kapil Muni Mainali, president of Sugarcane Farmers´ Association.
With the partial exemption of VAT on sugar, the cost per quintal of sugar would go down by Rs 43.
The Ministry of Finance on Sunday had proposed 60 percent VAT exemption on sugar. However, farmers had continued their agitation on Monday, bringing vehicular movement along East-West Highway in eastern Nepal to a grinding halt.
Prior to fresh revision in prices, sugar mills were offering Rs 320 per quintal of sugarcane. They had said that they would be able to offer Rs 421 per quintal of sugarcane as demanded by the farmers only if the government became ready to completely waive VAT on sugar.
Sugarcane farmers in different Tarai districts had been staging protest for the last couple of months, demanding the government to fix reasonable price for their produce. Over 1.5 million farmers across the country are involved in sugarcane farming.
Earlier, The farmers had partially closed the East-West Highway on Sunday and Monday and had announced complete blockade from Tuesday.
They had threatened to disrupt the highway for an indefinite period starting Tuesday citing inappropriate price evaluation of sugarcane. The farmers claimed they were forced to make the announcement as the government turned deaf ears to their agitation for the past two weeks.
The farmers had clashed with police in Sarlahi in their attempt to block the highway for two hours on Sunday. Police fired into the air and used tear-gas shells to disperse thousands of farmers who were demanding increase in the price of sugarcane on Sunday.
The District Administration Office on Monday was forced to clamp a curfew along the highway in Sarlahi to contain possible violnece as the farmers had planned to continue protests even through Monday. The curfew was effective from 8am to 5pm Monday.
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