Sugaronline Editorial - The problem in Pakistan By Meghan Sapp
Published: 01/05/2018, 1:11:00 PM
Failure to see the big picture will only lead to more failure in Pakistan.
When Pakistan’s cabinet agreed to subsidise 1.5 million metric tonnes of sugar at the end of November just as the world sugar market was going into possibly the largest surplus in more than 15 years, it’s no wonder its neighbours got nervous. India is looking at slapping a 75% import tax on sugar to make sure the regional glut doesn’t flood its already precarious domestic market.
But the need to ship sugar onto the world market may end up being the least of Pakistan’s problems. Its sugar industry is devolving into a civil war that has not only seen violence between cane farmers and millers but has kept the crush on hold for months.
Farmers in Sindh are protesting over the price of cane, refusing to supply mills until a new, higher price is set. A total of 25 out of 32 mills in the region have stopped crushing as a result of the dispute but as time wears on, cane is drying out and the sugar content is falling.
Last week, the high court ruled that mills should pay farmers the standard price but hold an additional amount in reserve to be paid to farmers should the agreement go their way or to be retained by the mills if it goes the other way. Protests have been going for well over a month while mills are claiming poverty, saying the government hasn’t paid them for their export subsidy from the previous season, so they can’t pay higher cane prices to farmers.
Now the federal food security minister is stepping up the game, calling out the Sindh government for refusing to take responsibility for sugarcane subsidies for farmers and instead putting the blame on the federal government where he says it doesn’t belong.
Then there are three mills in Punjab which have not opened this season, despite the crush in the region typically starting in November. The high court is demanding those mills be punished for not opening their doors, which has in turn put farmers in a precarious situation because without a market for their cane, they can’t plant wheat. Farmers there have also been pushing for higher prices ahead of the crush, but the crush moved on without them. The province’s food minister recently stood up for the farmers, saying protecting their rights was surmount above everything else.
Reducing sugar availability on the world market from Pakistan as a result of a smaller crush would only help the situation externally, but internally continuing this dispute on prices and crush dates indefinitely will only help to destabilize industry, as well as the rural communities that supply the cane, which can have further negative consequences well beyond those of sugar.