ISLAMABAD, Nov 29: The government and the sugar industry reached an understanding on Friday to set up a sugar industry stabilization and development fund mainly for the immediate export of 100,000 tons of sugar and look after the industry on long-term basis, official sources told Dawn.
The fund would be operated by a high-level permanent board led by the finance minister/head of finance ministry as head/ex-officio chairman and comprise secretaries of commerce, industries, finance and food, besides secretary revenue division and chairman CBR.
This was the outcome of a meeting presided over by Commerce Minister Humayun Akhtar Khan here. Secretaries of industries and production, commerce and finance and representatives of Pakistan Sugar Mills Association (PSMA) attended.
Four members would be appointed by the government from the sugar industry and one from the growers, while joint secretary industries would coordinate the board meetings to be held at least thrice a year.
The appointment of all members would be for two years. The fund shall be non-lapsable and would be maintained at the federal treasury through personal ledger accounts under the head of Sugar Industry Stabilization and Development Fund.
Sources said sugar industry had already ironed out a deal with adviser to the prime minister on finance, Shaukat Aziz before the formation of the new government that was also supported by Punjab governor Khalid Maqbool.
The deal envisaged domestic sugar prices stabilization at around Rs22.20 per kg as the industry pointed out around 400,000 tons of surplus sugar this season and feared price crash.
Both Shaukat Aziz and Industries Minister Liaqat Ali Khan Jatoi avoided to hold meeting with the sugar industry following publication of an advertisement by the PSMA threatening closure of their mills.
Sources, however, said Shaukat Aziz requested the commerce minister to meet the PSMA members and finalize modalities of the already agreed formula for sugar export.
The PSMA representatives told the meeting on Friday in the very outset that if their demands were not met, they would not start crushing in Sindh and rather the mills operating in other parts would be closed down in next ten days.
Under the agreement, the meeting decided to establish a sugar industry stabilization and development fund. This would come through cess to be collected by Central Board of Revenue at the rate of 2.5 per cent on ex-mill sale of sugar and any income to the fund from its investments and property.
The draft of the agreement was handed over to PSMA by the secretary industries for opinion and implementation after another meeting in about tens days time.
The fund shall be utilized by the Board to provide support to sugar industry for the export of sugar surplus and provide assistance to the industry for stabilizing prices in the domestic market.
The fund shall also be used for any other activity which is required for the development, modernization of sugar industry, diversification of products and increase in yield and sucrose content in the sugarcane.
The Board would frame rules for the administration of the fund, approve its budget and make appropriations, incur expenditure within the sanctioned budget.
The Board will also have the powers to delegate powers as may be necessary and appoint committees and delegate such committees powers as may be necessary and accept donations and endowments.
The meeting of the Board could be convened on ten days notice while disputes would be decided through majority of the Board members.