Policymakers often tend to take decisions that defy logic. It is timely government decisions that help a weaker farm community — particularly in case of the support price — to ward off much of the possible market manipulation.

Somehow, the announcement of support prices is usually delayed, despite its adverse impact on farmers’ income and on the productivity of the wheat crop.

Until a few years back, the Sindh government used to issue the support price notification in October, and cane-crushing would start the same month. Later, the date for the commencement of the cane-crushing season was shifted to November, and so was the price announcement.

Going by the earlier official practice, almost half of the crushing season has passed, but full-fledged harvesting — linked with timely commencement of the season — is yet to begin. Only a few sugar mills have started crushing. Matiari Sugar Mills in lower Sindh is one of them, as it usually starts in October. It is offering last year’s sugarcane price of Rs172 per 40kg till the price controversy is settled and a fresh support price is fixed by the government.

Considering the threat of climate change, agriculture remains at the mercy of mother Nature. Recent extreme weather events in Sindh proved disastrous for crops like cotton, sugarcane and rice, with farmers incurring financial losses. Delayed sugarcane crushing also raises the prospects of a delay in the wheat crop, which increases the possibility of lower per acre productivity.

A farmer — big or small — is generally supposed to re-invest the money he recovers from his outgoing crop and to settle his debts, obtained from banks and informal sources. The whole economic cycle gets disturbed if the cash-flows are hit by uncertainty.

The sugarcane support price remains a bone of contention between sugar mills and growers. But this year, the millers challenged the government’s right to fix the cane price under the Sugar Factories Control Act 1950 in the high court, adding a new dimension to the controversy

Presently, sugarcane growers are hard-pressed to sell their crop at less than the desired price primarily because they have to sow rabi’s wheat crop. Standing cane crop in fields requires irrigation water, which is otherwise meant to be used for sowing wheat.

After attaining maturity in September-October, sugarcane starts losing weight; rats often damage its roots as well. While this causes losses for growers, it suits the millers as it increases the recovery of sucrose content.

“On November 17, a test report of sucrose content in sugarcane grown in the Sheikh Bhirkiyo area showed sugar recovery of 9.7pc, against our [Sindh’s] benchmark of 8.7pc. On December 8, the recovery was recorded at 10.1pc,” says Abdul Majeed Nizamani, president of the Sindh Abadgar Board (SAB).

He welcomed the Rs182 per 40kg support price fixed by the Sindh government, but didn’t mince words in criticising its flawed policymaking, which, he said, creates uncertainty among farmers and the market.

He wondered why the government was unable to notify the sugarcane price in October as required under the Sugar Factories Control Act 1950, and made factory owners abide by it. “I remember a period when crushing started even in September in Sindh.”

The controversy over the cane support price is a result of a petition filed by the Pakistan Sugar Mills Association (PSMA), Sindh zone, in the Sindh High Court, arguing that the millers are unable to pay Rs182 unless the government fixes the price of sugar. The millers decided not to crush cane unless the case was decided. The high court passed an order last month, seeking the fixation of the price of sugar in consideration with farmers’ input cost.

“In the high court’s order, the government was not required to fix the price of the sugarcane crop. The court simply called for fixing the price of sugar. But the Sindh government, surprisingly, came up with new a notification for cane price, cutting the rate per 40kg from Rs182 to Rs155,” argues Nabi Bux Sathio, general secretary of the Sindh Chamber of Agriculture (SCA).

The Sindh agriculture department issued a fresh notification on December 3, terming the Rs155 an ‘interim’ price till the fixing of the price of sugar, to avoid delay in the sowing of the rabi crop and to commence the crushing season.

Sindh-based cane growers like Mahmood Nawaz Shah take this as a clear case of conflict of interest, as many sugar factories are owned by those sitting in the government and assemblies. They are there to protect their own interests, leaving farmers high and dry. “Sindh’s SCA 1950 is aimed at protecting the growers’ interests, but the policymakers keep us confused to create a situation that suits the millers alone.”

The sugarcane support price remains a bone of contention between the government, sugar factory owners and growers, and is witnessed in controversies that arise every season. But this year, sugar factory owners challenged the government’s right to fix the cane price under the Sugar Factories Control Act 1950 and added a new dimension to it all.

The millers did not plead with growers, perhaps deliberately, as a necessary party in their case. But representatives of Sindh’s farmers bodies themselves moved an application to become interveners in the petition. It was then that the court directed the government, in unambiguous terms, to fix the price of sugar, which means that the price of cane won’t be touched.

Farmers believe that the Sindh government buckled under the millers’ pressure and went for a downward revision in the price, reducing it to Rs155 from Rs182 per 40kg. Eventually, though, Sindh Chief Minister Syed Qaim Ali Shah again fixed the price at Rs182 on December 7.

Published in Dawn, Economic & Business, December 15th , 2014