Cabinet likely to reverse farmer-friendly mechanism

SBP, banks oppose the move that will delay payments to sugarcane growers

ISLAMABAD: The federal cabinet, which is scheduled to meet on Wednesday, is likely to reverse a grower-friendly decision on timely payments for their produce, taken by the previous Pakistan Peoples Party (PPP) government, in the wake of pressure from the influential sugar barons.

During the PPP’s tenure, the cabinet in February 2012 had agreed that the sugarcane purchase receipts, to be issued by sugar millers, would be converted into cheques. It was also agreed that sugarcane purchase quantity and price would be printed on the receipts in a bid to ensure payment of a fair price to the farmers.

However, in November 2013, the sugar barons made an attempt to get the decision scrapped in the light of opposition from the Law Division.

The Ministry of Industries and Production also endorsed the sugar millers’ stance and made a request in that regard to the Cabinet Division. However, the division turned down the request, insisting that in terms of Rule 24 of the Rules of Business 1973, cabinet decisions were required to be implemented in letter and spirit.

On the contrary, the current PML-N government has not particularly worked to protect the interest of and stop the exploitation of growers, instead it has doled out billions of rupees in export subsidy and other support measures to the sugar millers.

In this situation, the growers have been left at the mercy of the millers, many of whom had stopped buying sugarcane during the current season, which prompted the apex court to step in to resolve the matter.

The millers are accused of paying for less than the actual weight of sugarcane as well as offering only Rs140 per 40 kg compared to the set support price of Rs180 per 40 kg.

The Ministry of Industries and Production and the Law Division have joined hands with the millers, which will lead to delay in payments to the farmers. In that regard, the ministry had sent a summary to the cabinet in November last year. Now, the cabinet has decided to take up the matter on Wednesday.

This came despite the fact that an association of commercial banks had supported the growers and even the State Bank of Pakistan (SBP) had endorsed the old mechanism, saying it would guarantee timely payments to the farmers.

Apart from this, all key stakeholders including the Ministry of Finance, Ministry of National Food Security and Research, Federal Board of Revenue, cane commissioners of Punjab, Khyber-Pakhtunkhwa and Sindh and the Kisan Board had supported the printing of sugarcane purchase quantity and price on the receipts.

In its summary, the ministry of industries said it had consulted all stakeholders and the Law Division and Pakistan Sugar Mills Association expressed serious reservations about converting the receipts into cheques.

It argued that the mechanism could not be implemented due to opposition from the Law Division and sugar millers, therefore, the cabinet should revoke the previous decision.

Published in The Express Tribune, January 31^st, 2018.

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