The outgoing Sindh government has fixed the sugarcane rate at Rs425 per 40kg for 2023-24 and announced November 15 as the commencement date for crushing season. This is something rarely seen in the last 15 years.

The farmers find this beneficial. The last government raised sugarcane’s price substantially and this change almost seems to be as per growers’ demand as a departing gesture, for 2024 is considered an election year.

One of the vibrant growers’ bodies — Sindh Abadgar Board — wanted the sugarcane rate to be fixed at Rs445 as per its calculations of input cost. The current price is a 41 per cent increase over last year’s rate of Rs302 and 70pc over the 2021 season’s rate of Rs250.

Apart from other factors, such a spike in rate is attributable to electoral incentives. The outgoing government derived its strength predominantly from Sindh’s rural parts, and most of its parliamentarians are big farmland owners.

Unusually, millers have easily agreed to an increase in sugarcane rate and the date for the start of the crushing season

The most surprising and interesting element was the consent of the powerful sugar millers to not only allow the price increase but also to announce the start of the crushing season on November 15 in just one sitting of the Sugarcane Control Board. If history is any guide in the last 15 years, sugarcane’s price fixation has always been a thorny issue between growers and wealthy sugar millers.

Usually, influential factory owners resist the date of the start of the sugarcane crushing season and the rate requested by growers. And the government often agreed with the millers. In some years, the millers even paid rates lesser than the notified one to the great disadvantage of farmers.

Growers, on their part, always pressed for the early commencement of the crushing season, but millers always disagreed that the sugarcane crop needs time to mature till late November.

Veteran sugar cane producers like Abdul Majeed Nizamani recalled that there was a time when the crushing season date used to be fixed in October as mandated by Sugar Factories Control Act 1950. But then came an amendment to this Act 1950 introduced by the last PPP government. The amendment called for the commencement of crushing season not later than November 30.

Farmers faced double jeopardy in the last several years insofar as the sugarcane crop was concerned. On the one hand, they remained worried about the procurement of sugarcane crops at an adequate price, and on the other, they were concerned about freeing up their farmland promptly for other crops. Thus, they would sell their crops for a lesser price to or through middlemen to be able to cultivate wheat in winter.

Sugarcane crop is, by and large, a big landholder’s crop. Small- and medium-size farmers usually avoid its exploitation or are vulnerable to exploitation by sugar millers.

Notwithstanding growers’ demand to increase the rate given the increasing cost of inputs, the government didn’t raise the rate in crop seasons of 2016-17, 2017-18, and 2018-19, keeping it fixed at Rs182 per 40kg.

Sugarcane crushing has also been suspended after complying with the crushing season notification on the ground that they were not getting desired supplies from growers, which was increasing their cost of production. Growers’ bodies fought legal battles unendingly to protect farmers’ interests and often emerged victorious.

This year, however, millers readily agreed to the rate proposed by the former provincial adviser on agriculture. But before this consensus was evolved, former ruling party’s top leader and former president, Asif Ali Zardari, had hinted that the sugarcane rate could be fixed at Rs450 per 40kg.

Sindh Chamber of Agriculture vice president Nabi Bux Sathio said that it was rarely seen in the sugar cane sector that its rate and date for crushing were decided that quickly and almost as per the demand of growers.

“The rate will go down well with farmers, and they feel lucky that millers agreed to it without raising any eyebrows,” he remarked and said that millers must have also noted that they would find it hard to procure sugarcane crops to run the industry if the crop lost its acreage to a greater extent.

Sindh’s share of sugarcane cultivation in the country is 25pc. The rate for sugarcane crops here remains a rupee or two higher than the rate the Punjab government fixes because of higher sucrose recovery in Sindh’s sugarcane. Punjab’s sugarcane price was also fixed at Rs425 this year sans any controversy.

As for the date for crushing, it has historically been fixed in October. Figures available here show that from 1995 to 2006, barring 2002 and 2003, the crushing date was fixed as October 1. After the amendment to Act 1950 — probably done in 2009 — the date for the crushing season was fixed in November. In a couple of years, it was fixed in December as well. Sugarcane has been a long-duration crop, requiring almost 18 months before it is ready for harvest.

Sindh Abadgar Board (SAB) vice president Mahmood Nawaz Shah disagrees that sugarcane’s rate of Rs425 was anything to do with electoral interests.

He said millers have realised that strong-arm tactics against farmers have not yielded results. Rather, the crop has lost acreage, and the sugar milling sector will not remain viable if the controversy over sugarcane’s rate continues, he said.

Besides, he argued, sugarcane is no longer farmers’ first choice of crop. He said that Growers have started switching to other crops like bananas, Rhodes grass and vegetables. “It was a pleasant surprise for SAB colleagues when Pakistan Sugar Mills Association (PSMA) representatives offered a Rs425 rate even before the start of Sugarcane Control Board’s meeting,” he said.

Aslam Farooq, a former PSMA chairman, said it was useless to argue about the rate in court when the Punjab government has announced the same price. Sugar’s price has to be increased as per market dynamics.

“There is a price hike, and farmers have their own issues with crops. Only the sugarcane crop survives in floods and heavy rains. We [PSMA] understand all these complexities,” he remarked.

This year, the government also fixed the wheat support price at Rs4,000 per 40kg in 2022-23, given losses in Kharif crops caused by torrential rains in the 2022 monsoon. By announcing 1.4 million tons of wheat procurement, it wanted to pay attractive rates to growers to enable them to grow more wheat.

Published in Dawn, The Business and Finance Weekly, August 21st, 2023