ONCE again, sugarcane crushing season has arrived and the matter of setting a support price for procurement threatens to be a thorny affair.

Thus far procurement is taking place under an indicative price in Sindh of around Rs160, whereas Punjab has only just announced its price of Rs180.

Last year, the failure of Sindh to announce its procurement price until very late in the season had consequences in Punjab, and the wide differential that existed between the notified prices in both provinces for a brief period served as a source of tension in the sugar industry, with Punjab mill owners claiming that their counterparts in Sindh were reaping an undue profit from the lower price there and demanding similar treatment by their own government.

Also read: Farmers and millers grappling with sugarcane pricing issue

The matter was left to fester for far too long last year, and it would be better if that episode were not repeated.

Key to the whole process is the level of autonomy that the Sindh government can exercise against the power of the sugar mill owners.

Growers make for a substantial lobby in the provincial assembly too, and last year the government dithered between both, unable to make a decision and stand by it until very late in the season.

This year, the matter will be harder to resolve since the entire sector has been hit by collapsing world commodity prices, which have also caused sugar prices to decline sharply, and both lobbies — growers and mill owners — are going to jostle to offload the cost of this decline onto the other.

The Sindh government is likely to have an even harder time this year; this is one reason why it would be a good idea to wake up to the problem quickly and work towards an early announcement of a procurement price.

Punjab has already announced its price, keeping it the same as last year at Rs180, and it would be best for Sindh to follow suit and set a price that does not require the government to subsidise any of the parties.

Published in Dawn, November 30th, 2015