ISLAMABAD: The Federal Government is to revisit recommendations of Sugar Sector Reform Committee (SSRC) as some of the recommendations have been challenged by the Cabinet members and Cabinet Secretary, well informed sources told Business Recorder.
The Industries and Production Division informed that the Federal Cabinet in its decision of June 9, 2020 directed “Minister for Industries and Production should negotiate with PSMA for reduction in the price of sugar in the light of findings of report of Inquiry Commission on Sugar.
For the long term reduction and stability in sugar price a Committee should be constituted under the Minister for Industries & Production to review the existing sugar-related policies and cost of production mechanism. The composition of the Committee would be determined by the Minister for Industries and Production.”
MoF claims sugar prices easing out in Punjab, KP and Islamabad
In compliance with the Cabinet decision, the then Minister for Industries and Production constituted a committee comprising of following members dated 31st August 2020: (i) Minister for National Food Security & Research ;(ii) Advisor to the Prime Minister on Institutional Reforms and Austerity ;(iii) Special Assistant to Prime Minister on Accountability;( iv) Secretary, Ministry of Industries & Production;( v) Chairman, Federal Board of Revenue ;(vi) Secretary, Ministry of Law & Justice;( vii) Secretary, Ministry of National Food Security & Research;(viii) Director General, Federal Investigation Agency;(ix) Chairperson, Competition Commission of Pakistan;( x) Chief Secretary, Punjab;( xi) Chief Secretary, Sindh;( xii) Chief Secretary, KPK; and ( xiii) Joint Secretary (PSD), MOIP (Secretary of the Committee).
The Sugar Sector Reform Committee under the chairmanship of Minister for Industries and Production held seven meetings. The deliberations/ recommendations of the committee were compiled in report format for the perusal of the Cabinet in compliance with the Cabinet decision.
During discussion, the deregulation of sugar sector was questioned, especially given the cartelization by the sugar industry. Minister for Energy, former Minister for Industries & Production explained that Minimum Support Price announced by the government was only indicative and the sugar mills usually purchased sugarcane from the farmers at a price higher than MSP. He further maintained that regulation of the sector caused distortions and the government should let the market forces determine the prices of sugarcane and sugar.
The removal of duty on import of sugar would guard against manipulation of domestic sugar price by the Mills. The Cabinet Secretary pointed out that the recommended abolition of zoning of crops was in contravention to an earlier decision of the Cabinet, wherein National Food Security & Research Division had been directed to carry out a scientific study on zoning requirements, focusing on crop patterns to be adopted in various zones to boost agriculture productivity.
Furthermore, the Cabinet Secretary pointed out that free choice of area to set up sugar mills by the private sector through abolition of Sugar Factories Establishment and Enlargement Act, 1966, had also been recommended. This may lead to unregulated proliferation of sugar mills and, in turn, may negatively impact the area under cultivation for cotton and wheat crops. This aspect needed to be seen in the light of Pakistan’s textile exports to the tune of $16 billion this year and substantial wheat imports over the last two years.
The Minister for Energy clarified that the thrust of the recommendation was to promote competition by allowing new sugar mills within the existing declared areas and not to completely abolish the zoning. The Cabinet observed that the recommendations of the Committee needed further deliberations so it should be released for public debate and subsequent refinement.
Copyright Business Recorder, 2021
Comments
Comments are closed.