A hope had arisen after the establishment of district governments that the question of spending of local revenues in the concerned localities, and in a fair way, will now be addressed. However, all such hopes have dashed and very little has changed for the better on this front. Rather the situation has become even more worrisome in some respects.
The misuse of the Sugar-cane Cess Fund (SCF) by the district governments in most parts of the country, central and southern Punjab in particular, is one example of this unfortunate fact. The district Nazims of these areas are bent upon grabbing huge amounts collected under the Sugar-cane Development Cess Fund SDCF). This is causing a great deal of distress among the local farmers of sugar-cane and sugar millers, who are direct contributors to this fund.
The food department of the government of Punjab collects 80 paisas per 40 kilograms of cess fund, which is contributed equally by growers and millers. The deduction is meant to cover the expenditure incurred on the development of the sugar-cane crop and provision of infrastructure like the construction of farm-to-market roads and bridges.
The amount is also meant to be spent on research so that better sugar-cane varieties are developped, with high yield of cane and sucrose content. The cess is also collected in the Sindh province, where the rates have been changing and presently are 75 paisas per 40 kilograms. Farmers contribute 25 paisas (33 per cent) and millers’ share is 50 paisas (66 per cent).
Pakistan is not the only country to collect such a fund meant for the improvement of crops, ultimately resulting in the benefits for both growers and processors. Such schemes have worked successfully in many developed countries like Australia, United States and also across the border in India bringing positive changes for both growers and mill owners. Unfortunately in Pakistan, this fund has become a tool of exploitation of sugar-cane farmers.
It is not only the district administrations that have misused this fund and spent it on schemes that suit them politically. The tragedy is that the whole amount collected under the cess fund does not reach the treasury and is often held by the sugar mills. This happens due to the procedural flaws in the collection process, which requires sugar mills to deposit the amount of the fund with the provincial government. They hardly do so voluntarily.
The absence of efficient audit further aggravates this problem. It makes it almost impossible to assess the exact amount of the cess a sugar mill is liable to deposit in the treasury.
The provincial government subsequently transfers it to the concerned district administration that is required to spend the same for projects beneficial to the sugar-cane growers. The district administrations hardly attach any importance to this aspect and spend it according to their own priorities. This had continued in the past and the new district governments, headed by district Nazims, have not proved any different in this regard.
There are close to 70 sugar mills in the country. Contrary to the billions of rupees of business they do every year, the development projects completed with the amount collected as the SDDF in the concerned areas are negligible. The situation is hopeless in southern Punjab.
Sugar-cane growers are already suffering heavy losses due to attack of diseases on the crop during the last season and late start of crushing by the mills. The recent heavy spell of rains has damaged whatever little infrastructure existed in central and southern Punjab.Roads from farms to markets in these areas are badly damaged. Growers are facing hardships in transporting sugar-cane to the mills for crushing. While large funds are available with the Provincial treasury and district governments under the SDCF for improving the infrastructure, the Nazmeen concerned are using them for politically motivated schemes that benefit their own interests.
A number of farmers’ organizations including the Pakistan Kisan Welfare Council and the Pakistan Kisan Movement as well as representatives of sugar mills are protesting against this and have urged the Punjab chief minister to personally look into the matter and resolve it at the earliest.
The provincial government must ensure that the entire amount due under this head reaches the treasury. While transferring the fund to the concerned districts, it should also ask the district governments to spend the amount in concerned head and in the respective areas so that the hardships faced by the growers is minimized.