Govt warned against yielding to mill owners pressure

PSMA warns that sugar prices will rise if mills pay govt notified rates to farmers


Z Ali December 10, 2018
PSMA warns that sugar prices will rise if mills pay govt notified rates to farmers. PHOTO: FILE

HYDERABAD: In light of Pakistan Sugar Mills Association (PSMA) Sindh zone’s warning of sugar price hike if they have to pay the Sindh government notified rate of sugarcane to the farmers, Sindh Chamber of Agriculture (SCA) has cautioned the government against yielding to pressure. “The sugar mills are not complying with the apex court’s order [for payment of arrears of last 18 years to the farmers] and they are also blackmailing the Sindh government by asking for billions of rupees in subsidy,” said Kabool Muhammad Khatian who chaired a meeting of the chamber at its office in Hyderabad on Sunday.

PSMA, through an advertisement campaign, has contended that Rs182 per 40 kilogramme rate for sugarcane crop and payment of between Rs10 to Rs15 as quality premium will compel them to increase the price of sugarcane to Rs66 per kg. Currently the mills are selling sugar at Rs49 per kg, inclusive of Rs6.6 sales tax.

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According to PSMA, the cost of production, including tax, will augment to Rs66 for buying sugarcane at rates between Rs192 to Rs197 per 40 kg. They cite a difference or loss of Rs17 per kg to the mills if they were to sell sugar at the current price while buying canes at the notified rate. The PSMA called for an urgent meeting of Sindh government with the millers to resolve the issue.

The SCA, meanwhile, urged the government to implement its December 7 notification of starting the crushing season and fixing Rs182 price rate. The chamber also opposed PSMA’s stance against payment of the quality premium. “The recovery ratio in Sindh’s sugarcane is higher than Punjab’s sugarcane,” said Khatian, contending that receiving the premium is the legal right of farmers.

He deplored that for the last 18 years sugar mills have dilly-dallied payment of the quality premium as they took the matter to litigation in the courts of law. However, he added, a three-judge bench of the Supreme Court on March 20, 2018, ordered the mills to pay arrears of the premiums withheld for the last 18 years besides ensuring regular payment of premium every year.

Earlier this week the federal government allowed the export of 1.1 million tonnes of sugar by waiving certain conditions on the demand of PSMA. The Economic Coordination Committee relaxed conditions like start of the crushing season and the export bar against the mills which are defaulters of the banks or cane growers. Earlier this year the mills secured Rs1b export subsidy.

Under the Sindh Sugar Factories Control Act 1950, the provincial government has to fix the buying price and notify crushing season by mid-October every year0. However, for the last several years the government always procrastinates the notification for two or more months, often triggering the farmers’ protests across Sindh. In the current year as well, the government delayed the notification for more than 50 days.

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The SCA’s meeting also demanded afforestation campaign mainly on 1.9m acres land of the forest department to combat climate change and water shortage. The farmers’ representatives from Karachi, Sukkur, Sanghar and Ghotki districts attended the meeting through a video link. SCA Senior Vice President Nabi Bux Sathio, Muhammad Khan Sarejo, Murad Ali Khan Nizamani, Syed Babu Shah, Sikandar Sarewal, Kamal Khan Noonari and other office bearers and members attended the meeting in Hyderabad.

Published in The Express Tribune, December 10th, 2018.

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