It is indeed bizarre that while the sugarcane crushing season is in full swing, the government of Sindh is yet to announce the procurement price of sugarcane in the province. The delayed notification of the official price has resulted in certain absurdities. According to reliable reports, sugar mills in Sindh, barring a few, have started cane crushing for the 2015-16 season without waiting for the issuance of the notification of official price.
More startling are the reports that sugar mills in upper Sindh are paying a minimum of Rs 180/40 kg or so to cane producers but those in lower Sindh are still adamant to pay only Rs 160 per 40 kg. The leaders of cane growers have confirmed that sugar mills in Ghotki – two of them said to be owned by PTI leader Jehangir Tareen – have been paying Rs 180/40 kg to Rs 185/40 kg to growers because Ghotki was a district bordering Punjab, where the provincial government had fixed the cane price at Rs 180/40 kg, and the management of the mills feared that growers might sell their produce in that province if the equal rates were not offered.
Such a tendency is reported up to Khairpur where the mill owners are inclined to pay the higher price. Sugar mills in Nawabshah are also reported to be ready to pay the Rs 180/40 kg rate without publicly agreeing to it. In lower Sindh, millers are, however, paying last year’s price of Rs 160/40 kg and pressurising the provincial government to grant a subsidy to enable them to increase the procurement price to Rs 172/40 kg.
The callous and indifferent attitude of the Sindh government towards cane price fixation in the province is not understandable. Sugarcane is an important cash crop of Pakistan and a substantial part of it is cultivated in Sindh. It is not only important for sugar and sugar-related production like Gur and Shakkar but also serves as an input for paper and board industry besides providing a lot of seasonal employment.
It seems that the Sindh government, instead of making a firm decision based on strictly economic and commercial grounds, is torn between the lobbies of millers and sugarcane growers. Last year, the Sindh government had fixed the cane procurement price at Rs 182/40 kg and then revised it downwards to Rs 155/40 kg but when growers protested at this reduction, the Chief Minister restored the previous rate.
Millers did not agree to the new rate and moved the Sindh High Court. When they lost their case in the Sindh High Court, they filed an appeal in the apex court. Besides, the Sindh government needs to remember two other factors in this connection. Firstly, the announcement of sugarcane price already seems to be too much delayed.
The cane crushing season remains in full swing till February and most of the crop is crushed by the end of next month because recovery is generally low on delayed crushing. Secondly, the sugarcane crop could be easily moved between Sindh and Punjab because of joint borders.
As such, Sindh government also needs to take into consideration the procurement price in Punjab to stop the flow of crop to Punjab and keep the mills in Sindh province running. It must not be forgotten that five sugar mills are located in Ghotki district out of 38 in the province. It also needs to be remembered that the constant delay in the announcement of sugarcane prices could dishearten the producers as well as the millers and have a negative impact on the economy of Sindh.
According to Sindh Abadgar Board (SAB), no communication had so far been received from the Sindh government about an expected meeting on the sugarcane price for the current season. This is beyond comprehension as factors like recovery rate, cost of production, prices in other provinces and international prices which could help determine the price in the province must already be in the knowledge of the Sindh government.
The only hindrance could be the difference in views between the sugarcane growers and millers which could easily be reconciled. In case, the difference in opinion persists, the Sindh government could impose its own decision based on the merits of the case.