The cane production suffers from cyclic lows every 2-3 years, mainly because of the unending disputes between growers and millers.

And the lower cane output forces the country’s more than 70 sugar mills to often operate at about 50 per cent capacity. The ultimate victims of this acrimony are consumers, who have to pay high prices for sugar in case of shortages. Sugar sweetens tea, which is virtually a food item for low income groups.

“Industry’s procurement practices such as delaying the cane crushing season, buying cane at lower than the support price, short weighing, unjustified deductions and delayed payments reduce returns to the farmers’’, says a recent annual report on Pakistan Sugar of Global Agricultural Information Network (GAIN) of USDA Foreign Agricultural Service. The report also incorporates millers’ complaint that farmers grow unapproved varieties with low sucrose content, resulting in low sugar yield.

Millers delay payment of sugar cane to growers by raising disputes over the quality and sucrose content in case of a bumper crop. When the crop is less than projected, growers demand higher prices. In both the cases, the cane crushing does not commence from October 1-15 as it should be in a normal season.

For the current season, the government wants sugar mills to begin cane crushing from November 1 in Sindh and from November 15 in Punjab. But till now, no official support price has been announced, raising fears that cane crushing may be delayed and may commence in the first week of December.

Cane production touched a record high of 61.5 million metric tons in fiscal 2007-08. Sugar production too exceeded four million tons, providing ample room for export that fetched more than $82 million. But farmers in Sindh and Punjab have still to recover more than Rs2 billion from millers.

In late July, Prime Minister Syed Yusuf Reza Gilani, who is himself from a growers’ family, asked Pakistan Sugar Mills Association (PSMA), to clear all dues of farmers. “Money has just started trickling to us’’, Syed Qamaruzzaman Shah, Chairman of Sindh Chamber of Agriculture informed. In Sindh, some 27 sugar mills still owe Rs1.36 billion to farmers.

“Growers were demoralised because of delay in payment of their dues from millers and opted for alternate kharif crops-rice and maize’’, Mr Jehangir Tareen, a former federal industries minister informed Dawn from his farm in Rahimyar Khan. Tareen , a miller and also a corporate farmer, says that he does not endorse his peers’ attitude towards farmers. He is convinced that the row between millers and growers is harmful for the industry, the government and consumers. For the current season, his suggestion for cane support price is Rs90 for a maund.

“Competitive crops of cane are now fetching good prices’’ he argues and mentions rice which showed a record export growth last year and also fetched good price in the local market. Cotton is also getting a good price and so is the case with maize. In Seraiki Punjab, farmers are cultivating cotton followed by wheat which gives them attractive returns.

Qamaruzzaman Shah complained that because of non- payment from millers last year, farmers were not able to buy fertiliser for application at the right time. Then there was water shortage. Sources in Sindh Cane Commissioner’s office at Hyderabad disclosed that there was 14 per cent reduction in sowing area and crop situation is not as healthy as it was during these days last year.

Senator Haroon Akhtar Khan, another miller from Punjab, sees a comfortable Ramazan as far as sugar supply is concerned. Mills have more than 1.2 million tons of carryover stocks while Trading Corporation of Pakistan has about 375,000 tons. With an average consumption of 350,000 tons a month, that increases somewhat in Ramazan (September), there is enough sugar supply till November end.

But with a significant drop in cane-growing area this season, the sugar production is estimated at 3.67 million tons. Setting up a buffer stock of about half a million tons of sugar may warrant imports. International sugar prices are said to be ranging $400 a ton plus, excluding expensive freight.

The Senator’s prescription is to go for import of raw sugar which will cost about $60 to 70 less a ton. Overland import of raw sugar from India may also bring a saving in freight and create a buffer stock necessary to stabilise domestic sugar prices. Prices of sugar crawled up to Rs35-36 a kilogramme in local market recently. Retailers attributed it to transporters’ strike.The government immediately came out with a firm assurance that it has adequate sugar stocks that can last till next crushing begins.

However, the key issue remains unresolved that crushing should not be delayed because of the disputes between farmers and millers on cane prices etc., something that has happened since 2004-05. After late sixties, the country saw the worst sugar crisis in 2006 when National Accountability Bureau (NAB) was asked by Prime Minister Shaukat Aziz to carry out a probe. In its initial report, the NAB accused the then members of national and provincial assemblies and the Senate belonging to both the sides of the political divide, for creating the crisis. The NAB inquiry was suspended halfway and then Public Accounts Committee of National Assembly took up the job.

“Sugar industry is highly misunderstood,’’ complains Senator Haroon Akhtar Khan and pleads for understanding of its problems. He said farmers are getting good money for last few years but millers have suffered on account of bad quality cane.

According to industry sources, the federal food and agricultural ministry, in consultation with Sindh and Punjab provincial governments and PSMA, is in process of setting a system to link prices with recovery of sucrose content in cane.