Result of provinces’ apathy: Losses of sugarcane farmers top Rs66b

Mills in Punjab and Sindh have refused to pay official price

ISLAMABAD: Sugarcane farmers across the country have so far suffered an accumulative loss of over Rs66 billion after sugar mills in all four provinces refused to pay them the official price fixed for the current year.

The minutes of the Council of Common Interests (CCI)’s 35th meeting held on February 26 gives the picture of internal discussions headed by Prime Minister Shahid Khaqan Abbasi in the presence of the four chief ministers.

The above matter has been widely discussed in the Supreme Court of Pakistan which was also helpless at the culmination of the case as the mills in Punjab and Sindh had refused to pay the Rs180 per 40 kg for crushing of sugarcane.



Proof in the pudding

Data of Agriculture Policy Institute presented before the meeting shows that in four provinces the total production this year has been recorded at 65.69 metric tons of which Punjab has the lion’s share of 44.86 metric tons. Sindh produced 16.27 metric tons followed by Khyber-Pakhtunkhwa (K-P) and Balochistan with 4.52 and 0.03 metric tons respectively.

Minister for National Food Security and Research Sikandar Hayat Bosan briefed the committee that except for one or two sugar mills in South Punjab, no other sugar mill was paying farmers the minimum support price fixed by the provincial governments. “The mills are purchasing sugarcane from farmers at the rate of Rs120 to 130/40 Kg and getting signature from the farmers for the rate of Rs180/40 Kg,” said Bosan.

Interestingly, if the prices quoted by the minister and similar figures shared with the Supreme Court, the losses could go well past the Rs100 billion mark but the figures shared in the committee were of minimum threshold—Rs140/40 Kg.

As per the data presented, if sugar mills pay the official rate then they could generate a total profit of Rs296 billion against the 65 metric tons of sugarcane with Punjab reaping Rs201 billion profit followed by Rs74 billion by Sindh, and Rs20 billion by K-P.

Apathy of provinces

The discussion in the committee also clearly depicted the ignorance of the federal and provincial governments in commenting about the non-payment of official price to farmers.

Article 16 and 16-A of Sugar Factories Control Act, 1950 authorises provincial governments to fix indicative price and premium of sugarcane in contravention of orders made under the Act punishable with imprisonment and/or fine.

National food security secretary Fazal Abbas Maken informed the committee that issues had been observed for the current season including delay in crushing season delayed the sowing of Rabi crops. The delay has been indicated because of the farmers’ reluctance and protest to sell the sugarcane at less than the official prices.

Figure fudging

Maken also stated that receipts from the mills show payments as per notified prices “though factually lower prices being paid (by farmers). While in some cases cash receipts are not being issued and are substituted with unprinted receipts.



“CCI may resolve that respective provincial governments should ensure payment of notified prices, as per the ‘Sugar Factories Control Act’ and a committee may be constituted, with direction to submit report within three months,” said the secretary in the meeting to which nobody paid heed.

Meanwhile, Punjab Chief Secretary said that existing stock of sugar was not utilized therefore sugar mills were not ready to purchase sugarcane from the farmers.

Secretary to the Prime Minister Fawad Hasan Fawad said provincial governments should enforce the minimum support price and efforts of Punjab government to purchase sugarcane at Rs160/40 Kg were not justified.

Interestingly, there has never been any such price the secretary to PM had mentioned in Punjab as it was the figure the minister for food had mentioned earlier.

At this juncture Prime Minister Abbasi intervened, saying the role of federal government was only to the extent of provision of data for calculating the cost of production of sugar. He urged the provinces to take measures to prevent such a situation next year.

At the end of meeting, the committee directed the Ministry of National Food Security to work with provinces for early resolution of the issue.