ISLAMABAD: The Sindh government offered on Tuesday to reduce the minimum purchase price of sugarcane to somewhere between Rs168 and Rs170, down from its current price of Rs182 per 40kg for the crushing season 2014-15, provided the sugar mills owners and growers agreed upon it.

The suggestion was made before a two-judge Supreme Court bench by Sindh Advocate General Fateh Malik. Headed by Justice Saqib Nisar, the bench had taken up an appeal instituted by 19 sugar mill owners from Sindh, challenging the Dec 30, 2014 Sindh High Court verdict that had rejected the mill owners’ request and allowed the government to fix the purchase price at Rs182 per 40kg after cancelling the earlier determination of Rs155.

Though the Supreme Court granted the mill owners leave to appeal against the high court judgment, it asked both growers and mill owners to consider the provincial government’s offer and respond by the second week of February.

In Nov 2014, the Sindh government had fixed the minimum purchase price of sugarcane at Rs182 per 40 kg for the crushing season 2014-15, starting from Nov 14 last year. The price was fixed at a meeting of the Sindh Sugar Factories Control Board. The minimum price had been Rs172 per 40kg for the last two years, but the Sindh Abadgar Board (SAB), represented by the growers, had demanded the price be fixed at Rs210. The sugar mills, however, opposed the idea and insisted that it should be maintained at last season’s level of Rs172.

Senior counsel Hafeez Pirzada, representing the mill owners, argued on Tuesday that it was difficult for the owners to purchase cane from growers at the existing price of Rs182 per 40kg.

On the other hand, Senator Raza Rabbani, representing the growers, argued that mill owners were exploiting the growers and working like a mafia in lower Sindh, evident from the fact that they closed mills for 15 days at the start of the crushing season.

The court, however, was of the view that the government should develop some parameters or guidelines for fixing the purchase price of sugarcane and all stakeholders, including the growers, should know in advance what factors determined purchase prices.

But the mill owners pleaded before the court that they were aggrieved by the high court order because it was contrary to well-settled principles and inconsistent with the fundamental rights of sugar mill owners.

The petitioners also highlighted what they called “exploitative, unreasonable and economically unviable and unsustainable lopsided regulation of the sugar sector”, saying the minimum price of sugarcane was fixed at higher rates in each subsequent crushing season for the past several years, but the price of refined sugar had plummeted both internationally and domestically and was unregulated.

There are 37 sugar mills in Sindh that produced approximately 1.9 tons of sugar in 2013. In 2014, sugarcane was sown on 310,400 hectares as against 297,500 hectares in 2013.

Published in Dawn, January 21st, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play