HYDERABAD: A meeting between sugar mill owners and sugar cane producers failed to reach a settlement on the longstanding issue of quality premium and ended inconclusively, according to Sindh agriculture secretary Saeed Ahmed Mangnejo.

The meeting convened by Mr Mangnejo a few days back was held in compliance of Supreme Court’s directive to factory owners and growers to reach an out of court settlement.

Mr Mangnejo said that now the federal Ministry of National Food Security and Research would be requested to hear the two parties over the contentious issue.

Quality premium is an incentive to be paid to growers when sucrose recovery in sugar cane crosses the benchmark 8.7 per cent for Sindh’s growers and 8.5 per cent for Punjab farmers. Sugar recovery almost always crosses this benchmark every season.

Sugar mills in Sindh are not paying quality premium to growers for around one and a half decade since they moved the apex court, questioning the quality premium, in principle, on the ground that when they pay price for sugarcane why should they still have to pay quality premium additionally.

According to Sindh Abadgar Board (SAB)

president Abdul Majeed Nizamani, the issue went into litigation in late 90s when the millers challenged upward revision of quality premium to 0.50 paisa from 0.32 paisa per 40kg by the federal government.

Over the past few years, sugarcane price has become a bone of contention between mill owners and growers since a particular group with links to the ruling PPP which has become owner of most sugar mills has started dictating terms to Sindh government. And the government appears to be helpless before it.

“The meeting ended without reaching any decision,” said Mangnejo, adding the apex court wanted an amicable settlement between the two parties over quality premium which was not being paid to growers for a long time.

Sources said that sugar millers wanted the issue to be decided at national level by the Ministry of National Food Security and Research and sought time to consult other millers over a proposal put forward by the SAB president. Millers usually did not come forward with their viewpoint.

“Millers had been paying 0.32 paisa per 40kg to us before they took the matter to court over its raise by 0.18 paisa to 0.50 paisa. It means they had disputed the 18 paisa raise. So, I proposed we are ready to cut the raise by 0.9 paisa, which

will bring down the rate to 0.41 paisa per 40kg per and the millers should agree to it,” said the SAB president.

The proposal was backed by Abdullah Rafi of Sindh Chamber of Agriculture but the millers did not make any commitment and said that they needed to consult their colleagues in the Pakistan Sugar Mills Association (PSMA).

Even if the millers finally agree to pay the 0.32 rate, the dues they owe to growers have amounted to billions of rupees over the years.

A senior official said that Agriculture Policy Institution (API) had worked out a formula for sucrose recovery benchmark for Punjab, Sindh and Khyber Pakhtunkhwa in view of new sugar cane varieties which was to be discussed threadbare. “The issue of premium quality dues is to be decided by the apex court first as the revision of benchmark is another thing,” he said.

Presently, Sindh has 38 sugar mills and of them 34 had crushed cane in 2015-16 season. In 2014-15 season, millers managed to win a subsidy offered by the Sindh government of Rs12 per 40kg to pay a price of 172 per 40kg to growers, who were mostly paid Rs160 per 40kg by millers through the official support price was Rs182 per 40kg.

The payment of differential amount of Rs10 is subject to decision by the apex court on millers’ petition. Last year, the millers again demanded subsidy but outgoing chief minister flatly refused it.

“Practically, the millers avoid paying quality premium and that’s why they had challenged it in principle, otherwise, we are ready to discuss everything, be it revision of quality premium, its formula and fixation of sugarcane price,” said SAB vice president who pursued a petition, challenging Sindh government’s notification of Rs172 per 40kg issued for 2015-16 season.

“Everything becomes irrelevant if millers say they don’t want to pay quality premium and want to pay only for sugarcane,” he said.

Date for start of sugarcane crushing has not yet been announced by the government which should otherwise have been started from Oct 1 as per the Sugar Factories Control Act, 1950.

Published in Dawn September 28th, 2016

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