ISLAMABAD, July 22: Prime Minister Syed Yousuf Raza Gilani on Tuesday asked sugar mills to pay last year’s crop dues to farmers on a priority basis.

A delegation of Pakistan Sugar Mills Association (PSMA), led by its chairman, Shunaid Qureshi, met the prime minister, and assured him that growers dues outstanding against them would be paid by the end of the current month,” said an official announcement issued after the meeting.

The agriculture ministry in a meeting with Pakistan Sugar Mills Association (PSMA) early last month had asked for clearance of outstanding dues by end of June, which has not yet materialised.

The PSMA and the ministry of food, agriculture and livestock (Minfal) have differences over payment of around Rs40 billion to sugarcane growers. This withholding of the amount has badly affected growers’ financial positions to cope with the rising input prices.

An official said the millers have conditionally agreed to start payment to farmers for last year’s crop, if government procures at least 150,000 tons of sugar from mills through the Trading Corporation of Pakistan (TCP) on higher than market rate.The growers are facing problems due to inability of the mills to pay for their crop.

Minfal has already asked the cane commissioners to monitor the situation of payment to farmers in provinces on a daily basis and keep a record of the violating mills.

According to the official, the cane commissioners informed Minfal that the millers had flouted the official sugarcane procurement rate in all the provinces and had now resorted to blackmailing by attaching the issue of payments with the procurement of sugar by the government.

Official figures, compiled by the Federal Bureau of Statistics (FBS), showed a rising trend in the retail price of sugar. The national average price of sugar stood at Rs34 per kg against the minimum Rs31 per kg.

The sugar price stood at Rs34 per kg in Islamabad and Rawalpindi; Gujranwala, Faisalabad, Sialkot and Lahore Rs32 per kg. In Karachi, the maximum price stood at Rs34 per kg, while minimum selling price stood at Rs32.

The government had fixed official procurement rate for 40 kg sugarcane at Rs67 in Sindh last season, Rs65 in the NWFP and Rs60 in Punjab, but the mills procured sugarcane from farmers around Rs50, and in many areas, middleman exploited farmers while buying their crop even cheaper and committing massive irregularities in weighing, observed cane commissioners.

According to an official announcement, the PSMA delegation also briefed the prime minister of the energy co-generation at the local level (sugar mill) out of residual elements of the sugar industry.

They told the prime minister that with the establishment of co-generation power plants at the premises of sugar mills, not only the sugar industry, but overall power generation capacity of the country would improve.

They told the premier that sugar mills in Pakistan would be generating 1000MW of electricity by 2010 and it would be enhanced to 2000MW by 2012.

The prime minister formed a high-powered committee to examine the issues pertaining to co-generation of electricity and tariff issue with Nepra.

The committee is to be headed by minister for water and power while other members of the committee include secretaries of water and power, industries and Nepra chairman.