Export of sugar okayed by PM, cabinet told

Updated April 08, 2020

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Imran warns those hurling threats over inquiry reports. — WEF/File
Imran warns those hurling threats over inquiry reports. — WEF/File

ISLAMABAD: As tremors from the sugar and wheat scandal continued to rock the political landscape, the federal cabinet was informed on Tuesday that Prime Minister Imran Khan had allowed export of surplus stocks of sugar during the current year to support sugarcane growers with a condition that there will be no shortage of the commodity in the country.

“Prime Minister Imran Khan informed the cabinet that initial inquiry reports into recent sugar and wheat crisis was released on his directives and that he had allowed export of sugar this fiscal year to support sugarcane growers,” said Special Assistant to the Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan in a press conference after the federal cabinet meeting.

The government claims that the decision to make the report on the wheat and sugar scandal public denotes the prime minister’s resolve to punish those responsible for price hikes regardless of their political affiliations. However, there is still much that remains unclear in terms of who are culpable for the price hikes and the ensuing uproar that had forced the prime minister to order the inquiry.

While Pakistan Tehreek-i-Insaf (PTI) leaders Jahangir Tareen and Khusro Bakhtiar have been named as beneficiaries of the subsidy given on the export of sugar, it is still not clear who will be held responsible for the original blunders: allowing the export of sugar and then giving the subsidy.

Imran warns those hurling threats over inquiry reports

The federal cabinet had approved the export of sugar, as admitted by the special assistant on information on Tuesday. The Punjab government had approved the subsidy on sugar.

Dr Awan said the federal cabinet’s meeting was app­rised that in the Economic Coordination Committee’s (ECC) meeting it was informed that this year the country had two million tonnes of surplus sugar and, therefore, sugar mills’ owners were reluctant to buy sugarcane from growers. “Keeping in view the misery of sugarcane farmers, the prime minister allowed export of surplus sugar, with a condition that in case of local need sugar will not be exported,” she added.

On Saturday, two reports on the recent sugar and wheat crisis in the country were made public, exposing ruling PTI’s bigwig Jahangir Tareen and allied parties’ leaders federal Minister for Food Security Khusro Bakhtiar, Monis Elahi of the Pakistan Muslim League-Q and their relatives as being involved in getting undue benefit in exporting sugar and artificially increasing its price in the local market.

Dire consequences

On the other hand, the prime minister has warned those who are threatening [members of the inquiry commission] including sugar cartel, with dire consequences if they do not stop giving threats. It was unclear if the prime minister had ordered the law to take its course against those who have made the threats.

Meanwhile, the action against those involved in the sugar and wheat crisis continued as Jehangir Tareen has been removed from the office of party’s task force, followed by action against Prime Minister’s Adviser on Commerce Razak Dawood, who has been deprived of additional charge of adviser on industries and production. Mr Tareen has since denied being head of any such task force.

The cabinet was also informed that disbursement of Rs144 billion PM Coronavirus Relief Fund will start from today [Wednesday] under which 12 million poor families will be given four months stipend of Rs12,000 so that they could get food during their joblessness amid countrywide lockdown imposed to prevent the spread of Covid-19.

Briefing the cabinet, SAPM Mirza Shahzad Akbar said the inquiry report into the sugar crisis had revealed that sugar cartel fixed price of sugar for import by its own which always remained higher than the price of the commodity at the international market. “For example, the association of sugar mill owners set import price of sugar at Rs55 per kg while at international market it is Rs45 per kg. Thus, they asked the government to give Rs10 on per kg as export subsidy to compete the international price,” he added.

He said the committee has recommended that now the government should itself fix the price of sugar to end manipulation of sugar barons.

During the press conference, Dr Awan said that the subsidy to sugar mill owners was given by the provincial governments of Punjab and Sindh, and not by the federal government. “In 2017 the then prime minister Shahid Khaqan Abbasi had given Rs20 billion subsidy to Pakistan Sugar Mills Association (PSMA) when Salman Shahbaz, son of incumbent leader of the opposition Shahbaz Sharif met the PM with a delegation of the association and asked for the subsidy,” she said, adding that the Sindh government had also given subsidy to Omni group’s sugar mills from 2014 to 2018 at the rate of Rs20 per kg.

She said the final report of the inquiry commission into sugar and wheat crisis would be issued on April 25 after which the prime minister would take punitive action against those involved in hoarding and increasing prices of sugar and wheat/wheat flour in the country.

It has been learnt that owners of sugar and flour mills are quite worried because of the forensic audit as they know that all their bad deeds will be exposed in the forensic investigation.

The prime minister had ordered stern action against those found involved in the crises “irrespective of their status and party affiliation” as two types of actions were recommended in the reports — administrative action and legal action — after finding criminality in the forensic audit. The administrative action is against public office holders involved in the scams and for irregularities, negligence and backing “sugar and wheat mafias”. A separate action is against sugar and wheat cartels. The first type of action was started from Monday when the prime minister made significant reshuffle in the federal cabinet and removed some top government officials.

Dr Awan said the inquiry reports had suggested reforms in the sugar policy and pointed out some impediments in the system that needed to be rectified.

The cabinet was informed that members of the inquiry commission and even the prime minister were given threats by sugar mills’ owners that they would remove sugar from the market if any inquiry report was made public against them. “The prime minister warned them [mill owners] with dire consequences if they continue to give threats,” she added.

Mr Tareen is no more head of the PTI task force: Following the recent cabinet reshuffle, the prime minister removed Mr Tareen from the office of PTI’s task force after his name came in the inquiry report for getting “undue” benefits being one of the owners of sugar mills.

A source told Dawn that PM Adviser on Commerce Razzak Dawood has also lost his ministry of industries and production for not taking timely action against sugar and wheat flour cartels. The ministry of industries and production has been given to Hammad Azhar, who was previously holding the Ministry of Economic Affairs.

One of the significant aspects in the recent cabinet reshuffle is that the prime minister has started his action on the inquiry reports and changed the portfolio of party leader Khusro Bakhtiar from Minister for Food Security to Minister for Economic Affairs. The inquiry report into sugar crisis had revealed that Khusro Bakhtiar’s close relative Makhdum Omar Bakhtiar [owner of a sugar mill] had gained undue benefits in terms of subsidy in export of sugar and increasing its price not during the last year, but also in previous years.

PM relief fund

Dr Awan said SAPM on Social Welfare Dr Sania Nishtar informed the cabinet that the government was going to start disbursement of Rs12,000 as four months stipend to 12 million families in the country from today [Wednesday]. She said 4.5 million families will be given to registered beneficiaries of the Ehsaas Kifalat Programme formerly known as Benazir Income Support Programme [BISP], 3.5 million families of daily wagers through district administrations and 4 million families with the help of provinces. She said the money will be distributed through two banks — Bank Al-Falah and Bank Al Habib — and 18,000 different points, including 7,000 already designated points in the country.

She said the prime minister had directed all people concerned to ensure principle of social distancing and avoid crowds of people at all stipend collection points.

Talking about latest situation of coronavirus cases, the meeting was informed that viral disease was spreading in the country with a rate of 10 per cent every day. So far 3,864 confirmed cases have been reported and 55 people have lost their lives.

Published in Dawn, April 8th, 2020