LAHORE, March 11: The inter-ministerial committee formed by the government last week to review the surplus sugar crisis in the country is scheduled to hold its first meeting in the federal capital on Friday.

The committee was constituted on the directions of Federal Industries and Production Minister, Liaquat Ali Jatoi, following his meeting with representatives of the sugar mills and growers.

The committee has been given the task to consider the problems of sugar industry like surplus sugar, liquidity constraints, high production cost, working efficiency, etc, and propose appropriate short, medium and long-term measures to address them.

It would also consider the problems being faced by growers and suggest their solution. Apart from four federal and three provincial secretaries (from Punjab, the NWFP and Sindh), the 13-member committee also has two representatives of growers from Punjab and Sindh as well as three office-bearers of the Pakistan Sugar Mills Association (PSMA). It also has joint secretary of the federal industries and production ministry on it.

According to Punjab PSMA chairman Javed Kayani, the government has agreed in the last meeting that it would lift 300,000 tons of sweetener in the near future to ease the surplus situation and to ease the liquidity crunch.

It may be recalled that the government has bought, through the TCP, some 200,000 tons of sweetener but it has not helped improve the surplus situation. Mr Kayani claims that the industry would have at least 500,000 tons of exportable surplus at the end of Sept 2004 and before the beginning of the next crushing season.

"If this surplus isn't disposed of, we fear that the mills may not be able to pay to growers in time." He claims the presence of half a million ton surplus sugar means that the industry wouldn't be able to pay Rs12 billion to the growers.

The PSMA estimates about the surplus is based on production of over 3.8 million ton and domestic consumption of 3.4 million ton. The industry's carryover from the last season is said by the PSMA to be over 769,000 ton.

Pakistan Kissan Board (PKB) general secretary, Ibrahim Mughal, says the mills have yet to pay the growers around Rs3 billion for the sugarcane purchased by them this year in Punjab alone. Besides, he contends, the mills have not paid premium of about Rs5 billion to the growers in Sindh during the last three years for higher sucrose content.