HYDERABAD: Sindh’s sugar cane producers finally won a protracted legal battle over payment of quality premium against powerful sugar millers as the Sindh High Court ordered settlement of two decades old controversy.

Cumulative payments on account of the quality premium of growers, who would now lay their claims before millers for past two decades dues – would easily run into billions of rupees.

Two growers’ organisations had moved Sindh High Court for the implementation of Supreme Court’s March 5, 2018, order in the matter whereby the apex court had ruled that quality premium had to be paid by millers over and above benchmark sucrose recovery.

Sindh Abadgar Ittehad had moved a petition in Sindh High Court through its general secretary Mohammad Anwar and Sindh Abadgar Board (SAB) had filed an identical petition for the implementation of SC’s March 5, 2018, order this year.

Even after the apex court’s clear order sugar millers did not pay quality premium to sugar cane growers in last season of 2018-19. The SC had declared that quality premium being just and fair and based on statutory provision was legally enforceable.

The court had termed that the notification – questioned before SC – was validly issued and it dismissed the millers’ appeals. It ruled: “Future notification as per past practice for payment of quality premium should be issued along with notification of fixation of minimum procurement price of sugar cane and the same shall be paid to growers not later than two months after crushing season comes to an end”.

Sindh High Court puts to rest protracted case as growers win legal battle over

The quality premium is to be paid over sugar cane’s price - notified by Sindh government each year - against each decimal point of sucrose recovery of 8.7 per cent by each mill. SAB had won the premium case in Sindh High Court in late 90s but the millers preferred to go for appeal against it in the apex court which remained pending for a decision for around two decades. Finally, the appeals were dismissed and growers won the protracted legal battle against wealthy sugar millers early last year.

“We had fought this battle for almost 20 years before the SC finally ruled in our favour,” said a veteran sugar cane grower and SAB president Abdul Majeed Nizamani.

He recalled that millers had challenged the government notification for quality premium way back in late 90s when the premium’s rate was enhanced from 32 paisa to 50 paisa per 40kg.

“I remember the quality premium in early 70s used to be 7paisa or not more than 10 paisa before it was increased to 32 paisa,” he said.

Nizamani observed that more sucrose recovery from Sindh’s cane was attributable to coastal conditions in lower Sindh region which the sugar cane crop in Punjab did not have.

SAI president Zubair Talpur said that sugar cane growers would approach each mill for the recovery of payment of premium for 2018-19 and if they resorted to dilly-delaying tactics SAI would file contempt of court proceedings before SHC against defaulting mill.

Sucrose recovery from Sindh’s sugar cane has been historically higher when compared with Punjab whose benchmark until recently was 8.5pc. Sugar millers had agreed that sucrose recovery went as high as 10pc to 11pc in Sindh. The recovery had been 10.52pc in 2015-16; 9.85pc in 2016-17; 10.40pc in 2017-18 and 10.41pc in 2018-19.

A higher premium benchmark of 8.7pc for Sindh is easily understandable on account of higher average of sucrose recovery from Sindh’s sugar cane. Since recovery from Punjab’s cane is less than Sindh’s therefore Punjab’s slab was on lower side. And that’s why Sindh’s sugar cane rate is always a few rupees higher than Punjab’s.

Sugar cane’s notified price in Sindh this year is Rs192 per 40kg against Punjab’s Rs190 per 40kg.

In line with SC’s March 2018 order, growers were to get quality premium for 2018-19 crushing season (at a rate of 0.50 paisa per 40 kg) not later than two months after the crushing season ends. The crushing season for 2019-20 has started and sugar cane producers – at least in lower Sindh region down Benazirabad district – are still struggling to ensure supply of the crop to millers after 12 mills suspended crushing last week. But now reports indicate they are in the process of resuming crushing.

According to SAB vice president Mahmood Nawaz Shah, the SHC’s Dec 19, 2019 order for on the SC verdict’s implementation was written with the consent of 41 millers and grower bodies.

According to the order, he said, Cane Commissioner would determine suc­rose recovery rate for crushing seasons 1998-99 till 2018-19 in accordance with law within 20 days from date hereof and he would examine each notification separately and determine sucrose recovery rate according to each notification.

The order said that each grower would apply to respective sugar mill with claim for payment of the premium and submit its copy to Cane Commissioner as well. After the claim’s verification, the mills would make payment to the claimants.

In case, the amount is not paid despite the claim’s verification, growers may approach Cane Commissioner who shall take action in accordance with law against the sugar mill for non-payment of quality premium to growers, says the order.

“The reading of order is quite clear. It says now that millers have agreed to payment of quality premium and they have to pay it for each year when they had first stopped its payment in 1998-99 after paying it till 1997-98 crushing season,” said Mahmood Nawaz Shah.

Published in Dawn, January 1st, 2020