HYDERABAD: The meeting between government functionaries, representatives of Pakistan Sugar Mills Association and growers convened by Sindh Sugarcane Control Board on Tuesday ended without reaching any decision on support price of cane and date for commencement of crushing for 2020-21 season while sugar millers proposed uniform rate for entire country.
Sindh Minister for Agriculture Ismail Rahu who chaired the meeting in Karachi said that he would recommend the cane rate to cabinet for approval but did not elaborate when the next huddle would be convened to finalise the matter.
Secretary of agriculture Raheem Shaikh, Sindh cane commissioner, representatives of Pakistan Sugar Mills Association (PSMA) and growers participated in the meeting.
The millers insisted on fixing price of sugar at the board’s meeting but the growers disagreed, saying the price fixation did not fall within the board’s domain, and submitted proposals for the cane price for 2020-21 season in view of per-acre cost.
Last year, the Sindh government had fixed the cane price at Rs192 per 40kg.
Conventionally, the cane rate in Sindh is a few rupees more than Punjab’s because Sindh’s cane has more sucrose recovery ratio. If Punjab fixes the price at Rs200 then the Sindh government is, according to old practice, supposed to come up with a price a little over Rs200. But PSMA Sindh zone chairman Ahmed Ali Bawani does not see any rationale in this practice.
“A uniform rate should be fixed [in Pakistan]. Sindh produces around 1.5m tonnes of sugar and consumes around 0.7m-0.8m tonnes while the rest of the sweetener is sold in Punjab that costs us additional transport expenses,” argued Bawani.
He added 80pc of sugar production cost was procurement price of sugar cane. “There should not be different crop rates,” he said. All mills would start crushing before Nov 30 but it depended on growers if they were willing to ensure supplies to factories even before that date, he said.
According to Sindh Chamber of Agriculture (SCA) president, Miran Mohammad Shah, the chamber has already submitted proposal for sugar cane rate to government in view of input cost but he did not disclose it. The SCA, however, has been demanding a rate of Rs300 per 40kg for current season.
Sindh Abadgar Board (SAB) vice president Mehmood Nawaz Shah proposed the crop’s price at Rs225 per 40kg for 2020-21 season in view of rise in cost of production.
SCA vice-president Nabi Bux Sathio contested Bawani’s point and quoted a committee report prepared under prime minister’s directive for 2019-20 which indicated Sindh’s sucrose recovery at 10.79pc and Punjab’s at 10.32pc. “No representative of Sindh or growers was part of that committee which comprised Competition Commission of Pakistan, industries ministry and Punjab sugarcane commissioner,” he said.
He told millers they should offer a better rate to growers to encourage them as they were losing interest in this crop for multiple reasons. “Instead of sugar cane I can grow four crops of paddy, wheat, fodder etc in a year to earn between Rs70,000-80,000 an acre after deducting costs and tiller’s share. Above all I won’t have to face delays in payments or suffer due to suspension of crushing by mills,” he explained.
He said that currently sugar’s ex-mill price was Rs95 per kg and retail price was Rs110 which showed they were having better returns, hence, they should pay adequate price to growers.
The millers discussed sugar export of 2017-18 for which subsidy payment of Rs4bn had not yet been made to them. Growers told them that it did not fall in the board’s purview to discuss this matter as it could be taken up with federal government.
This year’s crop acreage fell short of the target. Sindh’s sowing target was fixed at 310,000 hectares but it was said to have been grown on 286,000 hectares. It was cultivated on 286,090ha in 2019-20. Sugar cane crop suffered losses in the heavy rainfall during August-September this year.
Mehmood Nawaz Shah pressed for payment of growers’ liabilities of 2018-19 season when the millers did not pay Rs22 differential amount. The millers paid Rs160 till Rs182 rate was notified on Jan 15, 2019. “They didn’t pay differential of Rs22 per 40kg for the crop they procured before Jan 15,” he said.
He also raised issue of liabilities of quality premium that were to be paid to growers in the light of Supreme Court’s verdict. SC had rejected millers’ petition against Sindh High Court’s judgement in favour of growers in 1998, requiring millers to pay quality premium over and above notified price on the basis of increased sucrose recovery.
Sindh Cane Commissioner’s office has assessed quality premium’s liabilities for above-mentioned period at Rs44bn after growers moved SHC for implementation of SC’s verdict in quality premium case.
The millers are, however, still reluctant to pay quality premium. Over the past several years, they had been arguing that premium was not paid anywhere other than Sindh.
PSMA had challenged premium’s payment in Punjab and Sindh without citing growers’ bodies as respondents. SAB had joined the petition as intervener to seek farmers’ right. It won the case in SHC and then the millers lost their appeal in SC a couple of years back.
Meanwhile, Matiari sugar factory started crushing on Wednesday and offered Rs200 per 40kg price to farmers, promising if the rate was fixed at more than that its differential amount will be paid as well. “Supplies of sugar cane are satisfactory when compared with last year’s,” said a factory official.
A cane producer of the area, Nadeem Shah, said that crushing had indeed been started and Rs200 were being offered to growers with a promise that if the rate was fixed at more than that its differential amount would be paid but if rate was less than Rs200 the payment would not be deducted for the crop already procured.
Published in Dawn, October 22nd, 2020