After completing the first three trouble-free months of the four-month cane crushing season, the crop has entered a difficult phase, according to the farmers who are regularly protesting against, what they call, deferred and delayed-payments, non-issuance of cane procurement receipts (CPRs) and cuts in payments.

The industry thinks the farmers are exaggerating their case. If they got regular payments for three months, why would mills not pay them now, when the season is near its end? If no one applied cuts on payments for the first three months, why would it be done now? “There may be some negligible number of genuine complaints against two or three mills but why are they being extended to the entire industry? The protests may be against particular mills, but painting the entire industry with the same brush is unfair, to say the least.”

The Food Department, which monitors the crushing through cane commissioner, says that when a law is in place, no exceptions can be created. “Even if there is one complaint, it must be proceeded against. The cane commissioner does not hold the entire industry responsible but acts against mills, which default. The industry itself is guilty of taking complaints against one mill as an act against the industry. The complaints, which never ceased completely during the last three months, are now gathering pace. The department was only trying to implement the amended version of the Sugar Factories (Control) Act.”

While the farmers decry the non-payment and delayed payment of cane by millers, the industry claims that farmers are exaggerating their case

The farmers provide the context of recently emerging complaints. Khalid Khokhar of Pakistan Kissan Ittehad, one of the protesting groups, claimed that the first three months went relatively trouble-free because of the amended version of the Sugar Factories (Control) Act that came into force last year and it was the first season conducted under it. The Act made any delay and cut in payments a criminal act, warranting criminal proceedings.

Similarly, non-issuance of the CPR also fell in the same category and it empowered the cane commissioner office, or its nominee, to start criminal proceedings (lodging of FIRs and even arrests) against the defaulting mills. The act also had political power behind it; the entire process of its promulgation — first in the shape of the ordinance and then as an act — was initiated, monitored and completed by the prime minister’s office. It doubled down on the impact of the act and the industry fell in line.

However, one of the mills went to court last November and got a stay order against Section 21 of the Sugar Factories (Control) Act, which had criminalised these acts. The commissioner’s office thought, and acted accordingly, that the stay pertained to one particular mill and the case.

In February, the millers again went to the court when four more FIRs were lodged in the Faisalabad area and the honourable court clarified that the stay order was blanket and against the entire Section 21. It defanged the commissioner’s office, freed the millers of the threat of the cognisable powers of the act and put the farmers back on the chopping block. The payments are now stopped regularly, cuts applied on lame excuses and non-issuance of the CPRs are back on the millers’ menu. That is what the farmers are now protesting against and would continue till millers correct their course, he threatened.

Abad Khan of the Farmers Associates Pakistan (FAP) chimed in with arguments to further strengthen the farmers’ case. In the name of cleaning the procurement chain, the millers, with the help of district administration, have thrown independent middlemen out of cane purchases.

“Only millers’ nominees are now in the field and are buying cane at the rate of their own choice, mostly in cash and for reduced payments, and thus help millers save money while avoiding banking channels, which the act necessitated. Since no trace and track system exists on the procurement side, cane arriving from any source is welcome because it keeps the mills well-fed and helps them skip the formal process. With the act held in abeyance, the millers are at their former self — afflicting the process with all ills which diseased it,” says Mr Khan.

The industry, however, insists that farmers are needlessly straining relations. Without denying the possibility of a few genuine complaints against some mills, Dr Hassan Iqbal of Pakistan Sugar Mills Association says that the total amount of default — for which the FIRs were lodged — was a little over Rs300,000 and the default period was not more than a week. “Each of the 40 mills in Punjab makes billions of rupees payments each season. Should there be FIRs and threat of arrests for such a paltry sum and that too for a week’s delay, discounting possibilities of human error, some computer mistake and banking channel issues etc? It escapes intelligence that mills, which paid billions of rupees to farmers, would hold back such a negligible amount without a reason — especially with the threat of criminal proceedings looming so close. That is precisely why the court was sympathetic to the millers’ point of view and granted it relief.”

Published in Dawn, The Business and Finance Weekly, January 28th, 2022