The sugarcane industry in Nepal: Opportunities and challenges

The favourable climatic, edaphic and topographic conditions make the southern parts of Nepal a suitable region for sugarcane farming. However, upon global comparison, Nepal ranks 41st in sugarcane production (2.93 million tons), 35th in harvested area (64,483 ha) and 67th in sugarcane yield (45.4 t/ha). This study aims to assess the current and potential financial standings of sugarcane production, explore the challenges that sugarcane farmers face and discuss potential solutions to such challenges. The study was conducted in Nawalparasi, one of the largest sugarcane-producing districts in Nepal. Data was collected through different methods, namely: (1) expert- level meetings; (2) focus group discussions with sugarcane farmers; and (3) sugar producer- level meetings. The collected information was supplemented by literature reviews, field observations and sugar mill visits. Under current cost and pricing conditions, sugarcane production is profitable and is a 'no-other-option' business for farmers. However, an increase in costs of farm inputs may be detrimental for sugarcane production. If additional benefits from sugar industry by-products were realised and shared amongst stakeholders, there is potential for the Nepalese sugarcane industry. However, there are currently numerous challenges for the sugarcane industry. Our present study has identified 12 issues/challenges. Among these, three major issues demand immediate attention: bitter relationships between farmers and sugar producers, the randomised process of determining sugarcane price, and delayed payment for sugarcane. This paper discusses how an enabling environment between sugarcane producers and buyers (sugar mills) can be developed and how the price of sugarcane can be logically fixed to create a win-win outcome.