Saturday, 7 February 2015

Sugarcane growers in Punjab reach a bad deal?

The federal government fears that sugarcane growers in Punjab will not get their due payment from millers due to a massive price difference in KPK, Punjab and Sindh, well informed sources in Ministry of Industries and Production. The government had fixed a price of Rs 182 per 40 kg for Sindh and Rs 180 for Punjab and KPK. However, Sindh mill owners refused to pay the announced price to growers and procured sugarcane at Rs 155 per 40 kg which was far less than prices in KPK and Punjab.

"We feel that due to higher prices of sugarcane in KPK and Punjab, and dumping of Sindhi sugar in Punjab many mills are bankrupt," said an official on condition of anonymity. According to him, Economic Co-ordination Committee (ECC) of the Cabinet had approved a package to export sugar but no mechanism has been finalised so far. According to Director General (Extension), Agriculture Department, Government of the Punjab, the cost of production of sugarcane in 2014-15 at farm level was @ Rs 142.05 per 40 kg, Mandi gate @ Rs 155.05 per 40 kg and by adding 25% investment incentive it soared to Rs 194 per 40 kg. He also said that the cost of production recommended by the Director General Agriculture (Extension), is not binding on the government of the Punjab. The growers had desired the fixation of sugarcane price from Rs 200 to Rs 250 per 40 kg, which was approved because of the domestic and international prices of sugar.

According to sources, Agriculture Policy Institute, Ministry of National Food Security & Research, Islamabad did not support any increase in the price of sugarcane for the 2014-15 crop. The sources further stated that Ministry of Industries and Production will convene a meeting of Sugar Advisory Board (SAB) very soon to discuss the issues being faced by the sugar industry and growers so that it could be determined what went wrong in the 2014-15 crushing season.

The ministry will also submit an update to the ECC in the forthcoming meeting on the issue of price difference between KPK, Punjab and Sindh. The sources further stated that a SAB meeting will discuss why prices of sugarcane were fixed on the higher side when Agriculture Policy Institute, Ministry of National Food Security and Research, did not support any increase. Supreme Court of Pakistan is hearing a petition filed by the sugarcane growers of Sindh. However, Sindh Sugar Mills Association has also become a party to the petition.
Copyright Business Recorder, 2015

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