When all else fails, the Trading Corporation of Pakistan (TCP) steps in as the marketing board of the last resort in service of the pampered sugar mills. The audacity of the Pakistan Sugar Mills Association representing the sugar mills is particularly galling if not outright outrageous and astounding.

Its Chairman has demanded of the government to stop from selling 100,000 tonnes of sugar into the market. The Association will tell the government when to sell, how much to sell and where to sell.

Because of the unsalable stocks, it wants the government to order the TCP to hold on to its stocks until next year, when there won't be enough sugar to sell and therefore, they could make better profits this year as well as the next and the next.

What bluster? It has demanded this step because of the fear that the price in the market will fall below Rs21/kg. It thus wants the government to collude in its evil design to fleece the consumer. It has no love for the consumer.

The demand of the Association appears to indicate that the government would give in. And why not when there is a close and collusive bond between the government and the sugar mills.

The sugar mills were established as a political bribe for the politically correct with huge loans from public sector banks and the DFIs allowing over-invoicing of the imported machinery so as to allow them to make a profit even before they started. Most of them made a profit much before the mills were established.

There are 78 sugar mills in Pakistan with 5 permanently closed and two under construction. Why are new units being allowed, when there is so much spare capacity. After all that is national wealth and they have no right to squander it as they please.

Obviously some one had to be bribed for the services rendered. They are located in Punjab, Sindh and some in the NWFP. Against a crushing capacity of 68 million tonnes they crush only 40 and against a capacity to produce 6.5 million tonnes of sugar they produce only 3.61 million tonnes.

It has an idle capacity of 44 per cent. Not only that it produces inefficiently but also it even fails to market its product and therefore leans on the shoulder of the government to serve as its marketing board. The government readily baby-sits this sick and sickening industry.

This newspaper carried an article few weeks back clarifying the position of the sugar industry, for which the government serves as the marketing board. Obviously, the sugar industry, which is the main beneficiary of the current policy, is hurt at the unpleasant facts the exposure of which tends to de-mystify the present policy.

The industry in its clarification has tried to justify its pampering by the government by blaming the well argued case in an earlier article for discontinuation of the flawed policy on phrases like the "flying facts" "inspired by ignorance" etc., and limitless ignorance on the part of the author of the impugned article.

However, the writer graciously accepts that the sugar industry has failed in many areas and particularly in crushing the entire sugar crop but would like to blame the grower in the same breath for not having achieved a higher yield which according to the author should have been doubled.

The idle capacity of the industry is blamed on the grower. An industry, which cannot crush half the crop, how would it be able to crush twice the quantity? Any industry in order to survive performs two main functions- production and sale.

This political industry cannot produce to capacity and whatever it produces it cannot sell. It would have gone into receivership in a well functioning democracy. It produces inefficiently at a much higher cost than in the neighbouring country and elsewhere and employs the federal government as its marketing agency.

An industry, which cannot sell its sugar in the captive domestic market, would be unable to sell more sugar if it had to crush twice the quantity and thus bankrupt the government in bargain.

That an industry has produced huge stocks that it cannot dispose of only reflects on its ingrained incompetence. Normally every industry takes care of its raw material and the final product.

It does not depend on crutches of the government to bail it out of the corner in which it has painted itself. In the three years that a sugar industry claims to have succeeded in doubling its stocks, with highly adverse impact on prices, revenues liquidity, etc. is an admission by the writer of massive mismanagement in the industry. Otherwise higher output is a matter of rejoicing.

The sole excuse of the industry to lean on the government to rid it of its stock is the sugarcane support price announced every year as a matter of form. In the impugned article it was very forcefully argued that the government should stop fixing the notional support price.

This must be done to deny the industry a solitary excuse of ripping the taxpayer off. The argument that the demand of sugar is inelastic is highly questionable. There are substitutes to sugar and the demand is not inelastic. It is not one of the most essential items on the menu of the common man.

One would have liked to see some economic arguments from the ghost writer instead of insinuations like ignorance etc. He claims that support price is also fixed for rice, cotton, oil seeds, etc., and therefore there is nothing wrong with sugarcane support price.

One thought that the industry was against the support price. This is simply not true. Except for wheat there is no other support price mechanism in place. An announcement of a notional support price without a mechanism in place is no more than an annual ritual.

Floating of a tender for procurement of sugar by the Trading Corporation of Pakistan in compliance with the government directive does not justify the policy of procurement. Simply issuing a tender does not validate the dubious credentials of the policy.

Would a tender justify buying opium or heroin in Afghanistan? The other argument that a meeting had decided that the TCP should rid the mills of its unsold and unsalable stocks do not lend respectability to a sterile policy, Simply because a meeting was held and a decision was taken by a bunch of official worthies cannot crown the decision with respectability. The so-called competition is limited to the few pampered sugar mills that are also sick and unable to sell their stocks.

It is not true that other countries also follow the same dead end policies. The consumer in Pakistan would be better off buying imported sugar at Rs10/kg as against Rs23 that he is forced to pay because of the vested interest of the sugar industry, fully abetted by the government of Pakistan.

The argument that if we stopped producing sugar we will have to import the same at huge cost to our foreign exchange, which for a change is not a limiting factor any more thanks to the enlightened policy of the government.

We are sitting on a pile of foreign exchange with no clue as to its uses. But what the author misses is the resources that sugar industry would release for deployment according to our comparative economic advantage, which would result in earning foreign exchange by exporting, say more cotton and/or rice.

That will be a better use of our resources, which are now tied up with moribund sugar industry and sugar plantation. The author has referred to the country's rural development (which) would be hanged through this foreign exchange drain, is a phrase which is highly meaningless.

He does not know we are sitting on a pile of huge foreign exchange for which we have found no use so far. Sugar industry does not provide an ideal socio-economic surge as claimed. And the figures of the people it employs are both exaggerated and unsubstantiated.

Another interesting fact unwittingly brought out by the honourable writer of the piece is that the industry has been doing the people of Pakistan a great favour by producing and selling here and abroad, bagasse and molasses.

Experts tell me that the industry in Pakistan wishes to make profit by selling sugar at twice the international prices unlike elsewhere where sugar is a by-product and molasses etc., the mainstay of the industry.

Lastly the writer in his concluding para dismissed the most potent argument against sugarcane and sugar industry by saying that farmers know the economics of growing crops better than economists.

How would he know without even knowing the alphabet of his mother tongue, considering the pathetic state of our commitment to universal education, is an enigma? The writer forgets that grower of sugarcane are as much pampered as sugar industry. He is provided free water and industry the rebates, subsidies and enormous patronage right from the beginning. Time for mercy killing of the industry has arrived.