LAHORE: Agriculture Republic, an agricultural think-tank, has proposed the government to allow setting up of mini/micro sugar mills, which should produce ‘jaggery’ (Gur) or brown sugar in sugarcane growing areas besides ensuring a minimum 20-30 percent cut in area under sugarcane next year to keep returns to farmers high.
Co-founder of the platform, Aamer Hayyat Bhandara while talking to Business Recorder here on Friday said that current laws allow only sales of sugarcane to authorized sugar mills and ban processing it into jaggery or brown sugar.
Bhandara claimed that over 60 percent of sugarcane is grown in Punjab, mainly in south Punjab. Usually farmers do not receive adequate compensation for their sugarcane; though this year prices remained good. But the future of sugarcane farming looks bleak, due to a variety of reasons including: Production of sugarcane this year was low, as farmers in Sindh substituted other crops over an estimated 50% of area previously under sugarcane. The Government calculated the production cost per maund to be Rs 190; and therefore, set the support price to be Rs 200. This meant that farmers had a profit margin of 5 percent on paper. This would be true, if the government's production calculations of Rs 190 were correct, and the farmers did not face deductions at the factory gate. But even if the calculations were accurate, a person sitting at home doing nothing would have received almost the same return by investing in Savings Certificates or Bank Term Deposits. So a farmer working round the clock whole week would have been served better by sitting at home, he was of the opinion.
“A profit margin of 12 percent to 17 percent might have been better, which would have led to Government support price of Rs 213 to Rs 222. A group of farmers had suggested a support price of Rs 220 to the Government, but it was not accepted, he regretted.
In order to ensure better returns to farmers, Aamer Bhandara said that stakeholders at his platform are proposing to reduce the area under cultivation which would increase the prices because of higher demands, allowing processing of Jaggery, which would promote a healthy competition with the sugar mills while exporters of sugar should not be given any subsidy on export. He said this should enable the exporters to compete on the basis of price or quality in the international markets.
“If the farmers replace sugarcane by other crops on a long term basis due to consistently low prices of sugarcane; it will create a paradigm shift in the country,” he said and added sugarcane was cultivated on 1.6 million hectares last year; with a 20-30 percent reduction the area under cultivation will come down to around 1 million hectares. Sugarcane is a water-intensive crop; and its replacement with crops which do not use much water will reduce the load on water aquifers. Growing other crops, even if it is fodder, will change the food security dynamics.
Quoting the example of textile mills, which according to him did not invest in better quality cotton, nor did they buy cotton on good rates for farmers, or even pay farmers on-time. The current shortage of good quality cotton is the result leading to low competitiveness of the overall sector. This ill treatment of farmers by processors of any crop will backfire over the long term. Survival of sugar mills, which ill-treat farmers, will be at-risk, but if farmers completely replace sugarcane with other crops, then the survival of the industry is at stake, he concluded.
Copyright Business Recorder, 2021
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