At a recent meeting of Economic Coordination Committee (ECC) of the Cabinet Chaired by Finance Minister, Senator Ishaq Dar payment of Rs7 billion subsidy on the export of 500,000 tons sugar was approved. The move needs to be rejected as the key beneficiary will be the owners of sugar mills and the overseas buyers. The moves also needs to be resisted because the Minister has recent presented a mini budget to mobilize addition Rs40 billion through imposition of taxes.
The overwhelming consensus is that feudal lords are growers of sugarcane as well as the owners of sugar mills. It is also said that politicians control a significant sugar production capacity. This way they rip-off the consumers, the government and small growers by delaying payment. Politicians and feudal lords try to hide their face behind higher cost of input and also talk about protecting the interest of small farmers.
It is secret that the reason for high cost of sugarcane is poor yield and not the cost of inputs. In Pakistan, particularly in Punjab sugarcane yield is almost the half of yield achieved in India. The successive governments, under the influence of feudal lords have been increase sugarcane support price and completely disregarding the poor yield.
It is also true that most of the sugar mills emerge inefficient, mainly of inadequate supply of sugarcane. Ideally the crushing period should not be less than 180 days. However, over the last many years average duration of crushing period gone down to below 100 days.
Therefore, it be most appropriate if sugar mills are not paid any subsidy. They have to stand on their own feet rather than living on the crutches of government support. Paying subsidy to inefficient growers and millers is simple waste of tax payers’ money.