Differences over new cane price

Farmers reject new sugarcane price
November 28, 2011
By Tahir Ali November 28, 2011

The province grows about 1.3 million tonnes of cane and produces about 0.4 million tonnes of sugar. – File photo

While the cane growers in Khyber Pakhtunkhwa are happy over the bumper crop this year, they are not satisfied with the support price announced by the Sugar Control Board recently.

Support price of the crop has been increased by Rs25 to Rs150 per 40kg from Rs125 per 40kg last year. But farmers say it is insufficient as the cost of production and land rent have disproportionately gone up of late.

Provincial minister for agriculture Arbab Ayub Jan last week held a joint meeting of the representatives of the sugar industry and the cane growers but it failed to resolve the issue.

Abdur Rahim Khan, general secretary of the KP Chamber of Agriculture, who attended the meeting, says the millers opined that the meeting was not a competent forum to review the cane price fixed by the Sugar Control Board.

“The industry representatives said they could not increase cane prices as they had set up mills to earn profit and not to incur losses. We will soon chalk out our strategy and may even ask farmers not to take their cane to mills and rather make gur of it,” says Abdur Rahim.

Murad Ali Khan, a leader of the KP Kissan Board, says the millers, belonging predominantly to the ruling elite, have the clout to get decisions in their favour in any forum.

“The SCB determines the cane prices, but being composed of officials, millers and their handpicked farmer representatives, it usually fails to safeguard the interest of cane growers,” he complains.

Premier Sugar Mills in Mardan started crushing on November 16 and rest of the mills in KP followed the suit, but farmers say they were already late by a month while gur making had begun nearly 50 days ago.

“Had crushing been started on time, thousands of acres would have been brought under wheat cultivation by now at the right time,” he says.

“ After harvesting, cane fields need to be kept fallow for about three weeks for soil renewal. But the differences over price between millers and farmers have made that impossible. It would delay wheat sowing and cut average wheat yield by about 30 per cent,” says Muhammad Khalid, an agriculture expert.

“It is strange that millers offer low prices for the cane at the initial stages when it has more juice and can produce more sugar.
And later when the juice is reduced and sugar recovery is less, they increase prices, raising not only the cost of sugar production but also damaging wheat output prospects for the coming year,” he laments.

“The cost of production (CoP) given by farmers is never accepted. As an SCB member, I would prepare details of the CoP and would ask the board to accept it or reject it with arguments. We would even advise them to fix cane price on the CoP basis prepared by the public sector’s sugarcane research institutes. But the sugar industry representatives would simply smile away our demand,” says Murad. He says millers always deprive farmers of fair prices.

“Each year at the start of crushing season, sugar prices come down and millers either delay crushing or stop it intermittently to compel farmers to sell their crop at lower price, especially when there is a bumper crop as this year and when the increasing cold and frost makes quick harvesting necessary to save the crop,” he says.

Gur is sold at Rs11,000 per160kg. For 300 maunds of cane, a farmer can earn Rs83,000 if he makes gur from it and around Rs56,000 if he sells it to mills. Why would he opt for the latter in this backdrop?

“Support price for the crop is fixed at Rs150/40kg or Rs187 per 50kg and no factory can purchase cane from growers below this price. The actual market price of cane depends on sugar rates. If sugar increases, the actual price of cane goes up. Last year cane was sold at Rs337/50kg or Rs270 per 40kg against the support price of Rs125,” he says.

Masud Khan, cane manager at Premier Sugar Mills, is, however, hopeful that sugar prices will go up and with it the cane prices once the government starts buying sugar stock available with the mills and allows export of trading surplus.

Sugar mills face competition with gur producers who consume around one-third of the crop. The province grows about 1.3 million tonnes of cane and produces about 0.4 million tonnes of sugar. As the area under cane cannot be increased, there is a need to develop high-yielding cane varieties.

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About Tahir Ali Khan
I am an academic, freelance columnist, writer and a social worker.

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