The sugarcane-crushing season lingers on in Sindh as sugar mills — having closed already — refuse to buy the crop at the government’s notified price.

However, a province-wide protest by farmers has persuaded the millers to resume crushing from last Monday. But they are determined to buy cane at Rs155 or less, instead of at the official price of Rs182 per 40kg.

Interestingly enough, some mills in Ghotki and Sukkur districts are paying the official price, according to growers. Around five mills are located in these two districts. The claim could not be immediately confirmed.

Cane growers also refused to give-in to the closure of the mills, and have held rallies and protests across the province. Amidst the pressure, millers are issuing indents to cane producers, and cane trolleys can be seen on roads moving towards different mills.

This cane-price controversy has potentially huge financial implications for the rural economy. For instance, many cane growers, after harvesting cane, sow rabi crops. A drop in wheat-sowing acreage cannot be ruled out if the land under sugarcane is not freed. Cane was sown on 700,000 acres of farmland in the province this season.

Most small- and medium-sized growers are now hard-pressed to sell their crop at throwaway prices, ranging between Rs130-150 per 40kg, on average. And they cannot afford to keep the crop intact in the fields.

Likewise, farm-labourers from Tharparkar, who harvest cane crop and sow wheat in barrage areas, remain idle. The ratoon crop, which was kept intact in 2013-14, would now become susceptible to rapid weight loss as compared to freshly grown cane. Many growers say they may not cultivate ratoon crop this year.

Most small- and medium-sized growers are now hard-pressed to sell their crop at throwaway prices, ranging between Rs130-150 per 40kg on average. They cannot afford to keep the crop intact in the fields

Farmer representatives blame the Sindh government’s inaction for this mess. They feel that the government has failed to protect their legitimate interests while facilitating sugar millers by issuing the Rs155 minimum interim price notification, which was subsequently set aside by the high court.

Sugar millers always oppose official prices on grounds of affordability. Yet, sugar recovery is now 10pc against Sindh’s benchmark of 8.7pc, says cane producer Mahmood Nawaz Shah.

Meanwhile, the Supreme Court issued notices to sugar mill owners last Tuesday in response to a civil miscellaneous petition filed by representatives of sugarcane growers.

On average, 40kg of sugarcane yields 4kg of sugar, apart from by-products like molasses (used as fuel) and bagasse (used for electricity). Shah stresses that the millers don’t count the market value of these products and insist on lowering the cane price alone. Sugar millers have not yet explained as to how the Rs182 price is unaffordable for them, say farmers.

And cane producers have submitted their expenses in black and white every time they met the millers in government-sponsored meetings. The millers, they allege, exaggerate the conversion cost of sugar, which is not more than Rs2 per kg as compared to the millers’ claim of Rs6 per kg.

Cane-crushing usually continues till February-March, and around 60pc of the crop is normally crushed by January if things move smoothly. But estimates show that only 15-20pc of the total crop has been harvested for crushing so far. Farmers fear the crushing season will be dragged to April, or even May. Meanwhile, the federal government has permitted the export of 650,000 tonnes of sugar, with a subsidy of Rs10 per kg.

While the interests of growers and mill owners converge in increasing sugarcane productivity per acre, it much depends on earnings and savings of farmers for more productive investment.

The focus needs to shift from pricing controversies, demonstrating stark conflict of interest to conciliation moves for achieving a win-win situation for both sides, which is vital for harmonious development of the cane-sugar economy. For this to happen cane prices should be fair and reasonable for both stakeholders to prosper.

Published in Dawn, Economic & Business, January 19th , 2015

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