With the cane crushing season at the fag end, sugar production is fast emerging as some sort of model that other agro-industries need to look into and, perhaps, also adopt some of its features.

The industry, barring some individuals and local payment problems, is paying the farmer his cost of production, margins and increasing the price. The farmers are responding by adding to the acreage every year, investing in the cane crop and increasing the yield. The industry on its part is increasing capacity to produce more, and also export. The last few years’ industrial statistics stand witness to this new trend.

In the last six years, the cane price has risen from Rs60 to Rs170 per maund – an increase close to 200 per cent. In 2007-08, it was Rs60, which went up to Rs80 per maund in 2008-09. It was Rs100 in 2009-10, Rs125 in 2010-11, Rs150 in 2011-12 and Rs170 per maund last year. This year, the same price was maintained.

With 95pc crushing complete, the season has, by and large, been hassle-free. The farmers got the price and payment to a large extent. The industry says it has cleared 92pc payments and farmers’ claim is little less than that – but it is over 90pc anyway.

With industry’s position remaining positive, the farmers have also responded to it over the last five years by increasing the acreage under cane. In 2009-10, total area under cane in Punjab was 1.5 million acres. In 2010-11, it went up to 1.65 million acres; 2011-12 added another 200,000 acres and last year it remained constant at 1.8 million acres. During the same period, the average yield in Punjab has also increased from 559 maunds per acre to 606 maunds per acre because of farmers’ efforts and climate change, adding another layer of income for farmers. For these factors, Punjab is hoping for 41 million tonnes of cane production this season, up from 31 million tonnes half a decade ago.

Both, the industry and farmers, have benefited. The industry paid relatively, as compared to other crops, good price and the farmers added 300,000 acres to the crop. Though there have been occasional reports of exploitation from both sides, with farmers charging as high a price as Rs250 per maund and the industry using not so fair tactics to increase its profits, but the over all picture has been positive.

Apart from price and the industry, there are few other factors benefiting cane crop, like the climate change bringing unexpected floods and rains that helped cane while some competitive crop lost on the price front.

New seed is making its way into these farms, where recovery and production have multiplied. That is why average production in Rahim Yar Khan area is over 650 maunds per acre against the provincial average of 606 maunds.

This mutually beneficial relationship also proved that market mechanism is much stronger than government initiatives. When the Punjab government, with all administrative, financial and political wherewithal, was promoting cotton in none-core belt areas (Faisalabad for example), the sugar industry was adding to its capacity and efficiency knowing fully well that it would ultimately defeat the official effort and it has: cotton has lost the area and cane has gained it.

The situation suggests that Pakistan may remain sugar surplus for quite some time. It is also because most of the politicians belonging to the ruling elite are mill owners as well. They would keep the crop attractive for farmers not only through finances but through policy and administrative measures as well.

Even this season, the country is expecting to go beyond six million tonnes, with Punjab producing around 3.2 million tonnes and the industry carrying over around 800,000 tonnes from last season. Pakistan has national requirement of around 4.8 million tonnes, leaving a surplus of 1.2 million tonnes for export.

These three factors — preference for the crop, accomodating industry and the farmers responding — underscore the necessity of an effective and efficient export regime that clears the glut each season before it is too late. The earlier government looks into it the better it would be. The industry is already knocking the doors for permission of 500,000 tonnes export.

These words are not to say that everything is fine in the sugar industry and cane farmers. There are still transparency, payments and allied issues dogging the sector. It is only to suggest that the positive happenings need to be converted into effective platform to refine things further, to every one’s benefit.