A CONTROVERSY has once again erupted over fixing minimum support price for the sugarcane with the arrival of crushing season in the NWFP.

The growers complain that the support price fixed by the provincial government at Rs65 per 40 kilogrammes is far less than the actual production cost. Whereas, the sugar mills have threatened not to start the crushing season till the prices were revised downward.

Cane pricing is a complex issue for the government, which has to safeguard the interests of both sugar mill owners and the farming community.

But a permanent mechanism which is acceptable to both the parties has not been devised with growers demanding more for their produce and the millers demanding cut in cane prices. In the NWFP, sugarcane is cultivated on an area of more than 2,55,000 hectares, whereas sugar beat is grown on 20, 000 to 36,000 hectares which caters to the needs of eight sugar mills of the province.

According to the growers, quality of sugarcane produced in Peshawar valley comprising districts of Peshawar, Nowshera, Mardan and Charsadda, has no match, and its overall recovery ratio is between 12 to 13 per cent.

At the provincial level, NWFP Cane Commissioner fixes the support price of sugarcane annually, and for the year 2007-08 it has been fixed at Rs65 as minimum support price per 40 kilogramme which is similar to the price set last year.

Frontier chapter of the Kissan Board of Pakistan (KBP), a representative body of the growers, is not happy with the price and wants its revision upward on higher cost of inputs.

Murad Ali Khan, KBP president, explains that the new rate should be linked to the cost of production, which is almost Rs100 per 40 kilogrammes.

He says Sindh and Punjab have fixed new prices of sugarcane at Rs67 and Rs65 per 40 kg respectively and demands that its price in the NWFP should be higher. The growers in the Frontier pay more than those paid by Punjab and Sindh in the shape of water, agriculture taxes and higher rates of fertilisers, he adds.

He points out that “The government is giving Rs470 as subsidy on every bag of fertiliser, which should have greatly helped in cutting down its prices. But dealers are selling such bags at Rs1350 instead of Rs950 and nobody is there to check it. Above all, the government is supplying sugarcane seed at Rs100 per 40 kg, but the growers are not allowed to sell their output even at Rs90 per 40 kg .”

Thee Kissan Board and the NWFP Sugarcane Crop Research Institute , he claims, have worked out per 40 kg cost of the produce at Rs100 per 40 kg. Even the sugar mills purchased sugarcane at the rate Rs110 last year, when its official price was Rs65.

The federal government had authorised provincial governments to fix prices of sugarcane. The sugarcane commissioner had held two meetings of growers and mill-owners in Peshawar last month but failed to agree on the new prices.

Accusing the government of backing the sugar mill owners, Mr. Khan says:

“Authorities are hands and gloves with the influential sugar mill owners that is why the growers’ interests are ignored every time.”

Mr Khan also deplores that the mill-owners had not started the crushing season, which should have commenced by Nov 1. This will affect the sowing of wheat as well as quality of the standing sugarcane.

In the past, disagreement over fixation of minimum support price had led to increased production of gur.

The gur makers say the government has not been able to satisfy the growers over minimum support price that has paved the way for them to go for gur production. Gur production has become an organised industry, where machines have replaced the outmoded methods of production.

The cane growers believe that gur production will be their last and a better option when the growers and mill owners are locked horns over fixation of support price.

Mr Murad, however, does not agree saying: “Southern districts of NWFP, adjoining tribal areas, Afghanistan and Central Asian Republics (CARs) are the main markets of gur, but law and order situation in the province is making movement of the commodity difficult. I don’t think that this time the growers will be able to get a better return because of security constraints”.

Despite reservation over law and order situation, most of the growers want to include gur in the list of exportable items.

“The growers will not opt for gur, if they get better price from the sugar mill owners, otherwise, they will have an option that could be utilised for increasing exports,” they said.

The Pakistan Sugar Mills Association (PSMA) has also rejected sugarcane support price of Rs65 per 40 kg and said that it is not going to start the 2007-08 crushing season.

In a statement the PSMA deplores that no consideration has been given to save the sugar industry of the Frontier province from bankruptcy, which is in competition with the sugar industry of Punjab and Sindh, by notifying extremely high sugarcane price on November 6.

PSMA is demanding reduction in the price of sugarcane; deduction clause for the infected Indian sugarcane (officially not an approved variety); and lifting of 15 per cent regulatory duty on sugar export to Afghanistan.

It further argues that sugar industry in the NWFP was left with huge unsold sugar stock and in the absence of financing from the banks, the mills cannot pay for the sugarcane to farmers.

The association has also asked the government to honour its commitment to maintain ex-factory price of sugar at the rate of Rs31/kg to enable the mills to absorb 33 per cent increase in sugarcane price.