The government has replaced the quantity-based sugarcane pricing formula with 'recovery content' ratio, and constituted a committee to work out a mechanism to ensure payment to the sugarcane growers within 15 days of delivery to the mills in the new system.
The mill owners will install core sampler at mills gate to check sucrose ratio of the crop and make it the basis for payment to the growers.
Sources told Business Recorder that the decision to fix the price on 'recovery content' ratio was taken at an inter-provincial meeting here on November 16.
The meeting deliberated on the problems of sugarcane growers and sugar industry in detail and took a number of key decisions to create better harmony among the stakeholders. The Minister for Food, Agriculture and Livestock, Sikandar Hayat Khan Bosan, presided over the meeting.
Muhammad Ali Malkani, Minister of State for Food, Agriculture and Livestock, Ismail Qureshi, Secretary, Food, Agriculture and Livestock, Pakistan Sugar Mills Association (PSMA) office-bearers, provincial Cane Commissioners, and growers' representatives had also attended the meeting.
The meeting was told that PSMA and growers had agreed to fix sugarcane price on quality and the committee constituted was being committed to work out the mechanism on priority basis for structuring the payment formula for the new system. The meeting asked the PSMA to install 'core sampler' in order to measure recovery from the first extracted juice at mills gate.
The committee comprises M Ali Malkani, Minister of State for Food, Agriculture and Livestock as chairman, MNA Qurban Ali Shah as member, Sugarcane Commissioner Minfal member/secretary. Provincial Cane Commissioners, President of Sindh Abadgar Board, President of Sarhad Chamber of Agriculture, PSMA and a technical officer to be nominated by Agricultural Price Commissioner will also be member of the committee.
To make the sugar industry more efficient and profit-making it was also agreed that by-products such as molasses and pressed mud (bagasse) should be value-added. Currently, pressed mud (bagasse) is used by brick kilns as fuel, which is wastage. For better utilisation it was agreed that sales tax may be imposed on it if consumed by other than growers.
The meeting was told that the number of distilleries would go up to 21 by 2006. The meeting decided that 10 percent ethnol will be blended with petrol in order to lower its cost. This would benefit the sugar industry in better utilisation of molasses, besides reducing petrol prices for the consumers.
Sugarcane research system in the country was also discussed, especially on the aspects of low yield and recovery.
In order to improve the yield and recovery of sugarcane crop it was decided that Pakistan should benefit from Australia through building up its capacity of present sugarcane research institutes in collaboration with provincial governments and Australian sugarcane research system.
The committee set up would also look into the present structure of the sugarcane research institutes and submit a report to benefit from Australian system for vertical improvement for more recovery.
The problems of middleman and unauthorised kandas were also discussed in the meeting. The growers and sugar millers opposed the middleman and unauthorised kandas' use.
The meeting directed the provincial Cane Commissioners to abolish unauthorised kandas and check the presence of middlemen to eliminate their role, once and for all.
The PSMA assured full support for putting to an end the practice of kandas and middlemen.
The meeting noted that payment to sugarcane growers was a serious problem, especially when cane production is on the high side. The meeting decided to make CPR a negotiable instrument. However, it was decided that PSMA should submit its comments on priority basis.
The outstanding payment of sugarcane growers was also discussed and Cane Commissioners of the provinces were asked to ensure that growers got timely payment.
The meeting directed the provincial Cane Commissioners to pursue the matter on priority basis for the new changes in Sugar Factory Control Act 1950, and make it comfortable for the growers and industry.
The agenda included working out of a sugarcane pricing mechanism on the basis of quality in order to encourage high sugar content sugarcane varieties, review of progress on value-addition of by-product such as ethanol sugarcane procurement at the mills gate through proper indent, making of cane purchase receipt (CPR) a negotiable instrument, estimates of sugar and sugarcane production in 2005-06, outstanding payment to sugarcane growers and progress on revision on Sugar Factory Control Act.
Federal Cane Commission gave the meeting a detailed presentation on agenda items including PSMA's visit to Australia. It included sugarcane growing and milling system in Australia. After detailed deliberation the meeting took several key decisions.
Currently, the sugarcane price in the country is based on quality, resulting in growing of low recovery cane varieties and thus affect the total sugar production of the country. The meeting was told that Minfal was pursuing a policy to encourage high recovery sugarcane varieties. In this regard Minfal has launched two projects--seed replacement, and payments to the growers. The meeting noted that solution lies in proper implementation of the system.