Cabinet bypassed again for sugar export

The federal government has decided to avoid a debate in the federal cabinet on the politically sensitive question of allowing the export of sugar and has instead circulated a summary to get endorsements from the ministers. The government took a short but secure route, which ideally should only be used under emergency circumstances.

The Economic Coordination Committee (ECC) of the cabinet on Monday had approved the export of an additional 150,000 tonnes of sugar on the basis of “factually incorrect” production figures. A total of 250,000 metric tonnes of sugar have been allowed to be exported by the coalition government. The ECC’s decision required the federal cabinet’s nod and the process has begun with the circulation of the summary among the minsters.

“Due to exigency, the decision of the ECC meeting in respect of additional item 1 titled Export of Sugar During the Year 2022-23 of the Ministry of National Food Security and Research, is submitted to the Federal Cabinet,” reads the summary. This is the second time the government has bypassed the regular process to facilitate the export of sugar. Earlier, the Finance Minister Ishaq Dar-led ECC had approved the summary as an additional item. Initially, the Minister for National Food Security Tariq Basheer Cheema (of the PMLQ) was not in favour of the decision to allow the export of sugar.

Former finance minister Miftah Ismail had also turned down the demand to allow the export of up to one million tonnes of sugar. They had cited concerns about the actual sugar stocks available and the claims made by the PSMA. The cabinet division moved the summary for ratification by invoking rule 17(1) (b) of the Rules of Business, 1973. Rule 17(1)b deals with the method to dispose of cases through circulation of summaries. The rules, however, are being exploited to avoid debates on politicallysensitive issues in a cabinet that is composed of the political parties having divergent views.

The prime minister, in his capacity as Minister-in-Charge of the Cabinet Division, had authorised the submission of the summary to the cabinet through circulation. The ECC had rushed to approve the export of 150,000 tonnes of sugar while also formalising PSMA’s role in the export. In the past, the Competition Commission of Pakistan (CCP) had accused the association of manipulating the price of sugar. The ECC, upon the recommendation of the Sugar Advisory Board (SAB), allowed the export of 250,000 tonnes of sugar inclusive of the previously permitted 100,000 tonnes on first-come, first-served basis, according to the finance ministry. The ECC also decided that the dollar proceeds from the exports would be recovered within 60 days of opening a Letter of Credit (LC).

The government has been showing unusual haste in allowing sugar exports while ignoring the fact, which was brought before it by the food ministry, that the sugar consumption and stock figures were factually incorrect. Despite the ECC being informed that SAB had observed variations and inconsistencies in the data provided by the provinces and the Federal Board of Revenue (FBR), the committee still went ahead with the decision to allow the export of the commodity. The government has, however, added a condition that only those sugar mills registered with the FBR will be allowed to export sugar. After the cabinet’s ratification, the Ministry of Commerce will issue a notification to allow the export.