HYDERABAD: Sugar cane growers are not yet out of the woods if payment of their produce supplied to different sugar mills in 2017-18 is anything to go by. Their liabilities that run into billions of rupees are yet to be cleared although sugar millers claim that there are no liabilities outstanding against them.

Sugar cane crushing season 2017-18 has come to an end a couple of months back. Sindh has crushed over 21.6 million tonnes of sugar cane this season to produce over 2.28 million tonnes of sweetener. In the previous season, the province had produced over 2.23 million tonnes of sugar.

“We as a growers’ body have informed the Sindh cane commissioner in writing that around 35 per cent of liabilities are not yet cleared. Our estimate is that the liabilities run into billions of rupees this season. But we are told by the commissioner that there are no liabilities and millers have cleared them,” said Sindh Abadgar Board (SAB) vice president Mehmood Nawaz Shah.

He regretted that growers by and large did not get a price of Rs160 per 40kg although the rate was endorsed by the Sindh High Court, otherwise the actual notified rate for the season was Rs182 per 40kg.

“Usually growers are paid Rs130 or so by sugar millers,” he claimed.

Growers stick to their claim of multibillion dues outstanding against mills

It’s the tendencies of a grower not to file a written complaint with the cane commissioner regarding payment of dues to him or about having received a price lesser than the official rate. He just keeps complaining. The SAB vice president says that having done a survey in different districts, he had submitted a letter to the cane commissioner informing him that liabilities are there against millers.

The just concluded season was very difficult for sugar cane growers from day one considering the fact that they did not get consensual rate of Rs160 per 40kg from sugar millers. Sugar millers have been reluctant to pay the price of Rs182 as notified by the Sindh government.

Sindh witnessed the controversy over price of sugar cane this year again after provincial government came up with a belatedly issued notification regarding sugar cane rate under the Sugar Factories Control Act, 1950.

The rate of Rs182/40kg was notified on Dec 5, 2017 which should otherwise have been fixed by November as per the set practice and under the relevant law.

Sugar millers had been raising a hue and cry even before commencement of the season vowing that they would not accept any rate above Rs102/40kg for the current season in view of the [increased] cost of production. This year 32 mills had functioned as compared to last year’s 35 which crushed around 22 million tonnes of sugar cane. Sindh had crushed close to 18 million tonnes of sugar cane in the 2015-16 season.

Sindh Chamber of Agriculture (SCA) vice president Nabi Bux Sathio says that “growers remained at the losers’ side this season again while sugar millers got all concessions that they had been enjoying every year”. He explained that millers got back-to-back subsides from federal and Sindh governments for export of sweetener to dispose of their stocks.

“The millers resorted to extreme measures and had even closed the mills after starting crushing. They kept mills closed for around a fortnight but then they resumed crushing as growers had also by then decided to run a protest campaign,” Sathio said.

Initially, the federal government had allowed a subsidy of Rs10.70 per kg on export of around two million tonnes of sugar. As if this was not enough, Sindh government also generously announced a subsidy of Rs9.30 per kg on sugar export of 20,000 tonnes.

Provincial government also has to share federal subsidy on a 50-50 basis which means that Sindh government allowed subsidy of Rs14.65 per kg on export of sugar for Sindh-based sugar mills. The federal government had linked payment of its subsidy to mills for 2017-18 with commencement of crushing season by the first week of November and clearance of all liabilities of growers.

According to Sathio, “during growers’ meeting with caretaker provincial minister for agriculture, it was revealed that the Sindh government had written a letter to the federal government informing it that except for two, rest of the mills started crushing in November 2017. However, practically the mills had started crushing only in January 2018”.

Previously, it was Syed Qaim Ali Shah-led Sindh government that had paid a subsidy of Rs12/40kg (close to Rs4 billion) to millers in view of a similar row when millers had refused to pay notified price of Rs182/40kg in 2014-15 season.

At that time also, millers had paid Rs160/40 kg from their pocket and got Rs12 from government to make it Rs172/40 kg while a decision about the differential amount of Rs10 per 40kg was to be decided by the apex court, where millers had filed a petition after losing their case in the Sindh High Court.

However, in the season (2015-16), the then CM Sindh had flatly refused to offer any subsidy to the sugar millers over sugar cane rate.

Growers feel that the Sindh government again came up with financial support for millers, who in most cases are connected with the ruling PPP.

This time round the issue also landed in the high court, which has been moved by millers to challenge the 2017-18 notification of Rs182/40kg rate. Previously, the court had first ordered millers (on Dec 21, 2017) to buy sugar cane at Rs172/40kg and deposit the differential of Rs10/40kg in the shape of a security calculated as per the last year’s crushing of cane and the amount paid.

Later, this order was reviewed and it was by consent decided that millers would pay Rs160/40 kg to growers while differential amount of Rs22 for 2017-18 season would be decided accordingly in view of the apex court’s ruling.

Published in Dawn, August 22nd, 2018