LAHORE, Dec 31: The Punjab government, under Sugar Factories Control Act 1950, has fixed factory gate price of cane at Rs40 per 40kg for the crushing season 2001-2002.

According to a government notification, the mills would be entitled to deduct 20 paisa per kg per quintel per kilometre for the cane purchased at procurement centres and 40km away from the factory gate.

The “indicative price” of cane for the season would be Rs42 per 40kg, it said.

Meanwhile, the Pakistan Sugar Mills Association (PSMA) has called a meeting of the industry to discuss what it called a new “crisis situation.”

According to a PSMA spokesman, the price has been fixed by the government arbitrarily. “The government claims that it has been done on the recommendation of the Cane Board. Whereas, all board meetings were also attended by PSMA representatives and no one recommended Rs 40per 40kg price. The minutes of the meetings were never given to the PSMA for the fear of dissent and now suddenly a price has been fixed,” he said.

He said the price would give a clear edge to farmers from Sindh where recovery rate was better from Punjab by two per cent.

In monitory terms, it gave Sindh industry an advantage of Rs16 per 40kg sugar cane. “Industrialists from Sindh can easily sell this cheap sugar in the Punjab and harm the local industry.”

On the other hand, Punjab farmers have rejected prices, saying they have been cheated once again. The government, during its meetings with representatives of farmers, agreed to ensure Rs42 per 40kg, says one of the participants of the meetings. “The farmers reluctantly agreed to the price. But this has been further reduced by Rs2 per 40kg. This is incomprehensible,” he said.

According to him, the government had committed a support price but it had backed out from it and the confusion of “indicative price” had also not been removed.