Growers versus millers

The Sindh government’s failure to ensure the growers get the fixed support price for their sugarcane may have political costs for the ruling party

Growers versus millers

A rare political alliance comprising opposition political parties -- including Pakistan Muslim League (Nawaz and Functional), Pakistan Tehreek-e-Insaf, Muttahida Qaumi Movement and major Sindhi nationalist parties like Sindh United Party (SUP) and Jeay Sindh Qaumi Mahaz (JSQM) -- and sugarcane growers on the issue of sugarcane pricing has created an interesting situation in the province of Sindh. This is because the ruling Pakistan People’s Party (PPP) appears to be standing with the mill owners in the current crisis.

The provincial government stands aloof in the entire situation as it had issued the sugarcane support price on the demand of growers at Rs182 per 40 kg on November 7, 2014, but the institution of Cane Commissioner is not interested in implementing this price. The growers have been forced to sell their sugarcane at Rs155 to the millers which they claim is less than the cost incurred on growing the crop.

The PPP is under fire because its leaders are said to be owners of a majority of sugar mills in Sindh.

The alliance includes apolitical growers’ bodies like Sindh Abadgar Board and Sindh Chamber of Agriculture whereas the Pakistan Sugar Mills Association (PSMA) is on the side of millers.

Former Pakistan Ambassador at the United Nations, Abdullah Hussain Haroon, is also a main supporter of growers’ demand on sugarcane price. He also led a protest demonstration in front of the Karachi Press Club last week. Two weeks back, he took part in a similar protest at Tando Saindad in Tando Mohammad Khan district.

19 of Sindh’s sugar mills have filed an appeal in the Supreme Court against a Sindh High Court verdict on December 30, 2014 and they demand the rates be fixed at Rs155 per 40 kg.

"Although we support the demands of the growers on the price, there is need to increase the ex-factory price of sugar as well," says Iskander M. Khan, Chairman PSMA. He was skeptical of the bad governance and absence of an effective pricing mechanism in the country.

"We would be happy if the farmers are paid the right price, but the support price is fixed to support the big landlords, who exploit the farmers," says head of PSMA while talking to TNS from Islamabad.

Millers and growers of Sindh have an almost identical complaint which is: growing input costs. Growers complain that millers are not paying them the right price, delay the payments and apply deductions on different pretexts. The provincial government had notified Rs182 per 40 kg rate but the millers refused and insisted on paying Rs155 per maund. It is alleged that when a few millers started paying the notified rate of Rs182, other factories with political support from the ruling party threatened them. This is almost a cartel-like situation.

The growers complain that the price of fertilisers, pesticides and machines are increasing which make the crop uncompetitive even at this rate.

On their part, mill owners have a similar complaint. They say the ex-factory price of sugar is less than their actual manufacturing cost, which is around Rs65. That includes the general sales tax (GST), which is paid directly to the government.

"When the retail price of sugar went as high as Rs80 a few years back, the sugarcane price was much less. But when the retail price of sugar has gone down to Rs50-55, the sugarcane support price has been increased," says the PSMA head.

But the opposition parties’ alliance has a different story to tell. They say the provincial government is behind the crisis as the ruling party leadership owns a majority of sugar mills in Sindh. "We have come to know that about 17 to 18 sugar mills in Sindh are owned by the Co-Chairman of PPP Asif Ali Zardari," alleges Nusrat Sahar Abbasi, an MPA from Pakistan Muslim League-F, while talking to TNS. The total number of sugar mills in Sindh is 32.

The growers and opposition parties’ alliance had organised a large protest demonstration at the Karachi-Hyderabad bypass near Hyderabad on January 27. Thousands of their supporters blocked the main highway for eight hours to press their demands for payment on the government notified rates. "If our demands are not met, we would hold a similar sit-in on February 11," says Abbasi.

Two former chief ministers of Sindh Arbab Ghulam Rahim and Liaquat Ali Jatoi, Leader of the Opposition in the Sindh Assembly Shaharyar Mahar, SUP chief Jalal Mahmood Shah, and Dr Rahila Gul Magsi, ex-District Nazim of Tando Allahyar led the protest. Others who also spoke on the occasion included MPAs Aijaz Shah Shirazi (ex-Nazim of Thatta district), Jam Madad Ali and Nusrat Sahar Abbasi of PML-Functional, Ismail Rahu of the PML-N, Nadir Akmal Leghari of the Pakistan Tehreek-e-Insaf, Ghazi Salahuddin of the MQM, Dr Niaz Kalani of the JSQM, Qadir Ranto of the Qaumi Awami Tehreek, Abdul Majeed Nizamani of the Sindh Abadgar Board.

A resolution passed on the occasion demanded implementation of the provincial government’s November 7, 2014 notification about the price of sugarcane. They also complained that there is a practice, among sugar mills in Sindh, of deducting 10-30 percent from the actual weight of the cane at the time of sale/purchase, which is their perpetual exploitation. They said their dues about the quality premium in the previous year (2013-14) are still not paid. Cane crushing season usually starts by mid-October. In case the mills do not start working, a penalty should be imposed on mills, they demanded.

"It is an example of bad governance and nepotism by the Sindh government, which has failed to implement its decision," says MPA Abbasi.

Each year we witness a hue and cry on sugarcane issue whereas it’s the government’s duty is to fix the support price and ensure payment to the growers. Mills delay the crushing season and the main sufferers are Sindh’s farmers.

Some political analysts see the opposition parties’ alliance as a good political move as far as Sindh’s politics is concerned. A similar unity among opposition political parties and nationalist parties was witnessed on the issue of Sindh Local Government Ordinance (Act) in 2012, when the coalition of PPP and MQM had introduced dual local governance system.

"Unfortunately, the PPP opponents have their own axe to grind. So they too want to grab this opportunity to score their point," says Mir Atta Muhammad Talpur.

"Had the sugarcane issue been settled by this time, farmers would have some cash in hand to buy fertiliser for their wheat crop," he says, adding that unfortunate delay in payments and low prices are forcing the growers to either not give the last dose of fertiliser to their wheat crop or buy it on credit from the suppliers.

"It is a desperate situation that is forcing the growers away from PPP, pushing them into the lap of opposition parties," he says.