According to sources in the PSMA-SZ, the FCC termed the current 2004-05 season as "alarming" in the context of sugarcane shortfall and consequent price trend, and that the Federal Government has taken notice of this situation with "deep concern".
The next, 2005-06, season may not be supportive either, as October-November sowing reports were not encouraging. February 2005 sowing in Sindh was not significant which could overcome the shortage arising out of preceding periodical sowing.
It was therefore thought imperative to evolve means to prevent a more difficult situation in the short term and devise a strategy on short, medium and long terms to increase sugarcane crop to be adequate for Sindh sugar segment.
After initiating the subject the FCC elicited the viewpoint of PSMA-SZ in this regard. The turmoil of sugar industry, particularly of Sindh segment coming under crunch, was attributable to:
ABSENCE OF SUGAR POLICY: What was being traditionally and in piecemeal related to (a) sugarcane crop size assessment (b) its minimum price determination (c) notifying commencement of crushing season, without consultation with PSMA-SZ, and (d) using outdated Sugar Factories Control Act, 1950 to intimate and penalise the sugar industry, etc.
UTILISATION OF BYPRODUCTS: Placement of sugar industry on strong footing, generating adequate earning, can be harbinger of development of downstream industries, promoting value-addition by-products, range of which is impressively wide.
The FCC was told that the sugar industry can and has to play the role of catalyst in sugarcane development of quality and varieties. This role can be efficiently played when the industry has resources.
This will brighten up rural socio-economic development and prosperity. Contribution of sugar industry in this regard, despite being tremendous, has never been assessed and even realised. This implies priority to be attached to sugar policy. Once this is achieved, other things will fall in place for progress and advancement thrust.
Some spadework has begun for support to sugarcane development in Sindh. A couple of sugar mills have commenced this key work and their setting example is bound to be emulated by others.
Sugarcane research institutional approach in the public sector is not attractive as can be gauged from old, stale varieties in cultivation since long. The existing institutions be infused real life to become live wire.
Reference was also made to import of raw sugar for/by sugar industry and later import of refined sugar which resulted in the fall of average wholesale sugar prices. Similarly, effective sales tax persisted @18 percent and cost of sugar production and cost of sales stayed on high pitch. As a result, sugar industry suffered very heavily.
Sugarcane crop also suffered because of drought spell in Sindh which prolonged for four years at a stretch. Badin and Thatta districts were particularly devastated by its impact. Water supply and distribution system was also patchy which affected sugarcane crop adversely.
Sindh was having 231000 to 260000 hectares under sugarcane crop. The area during 2004-05 had come down to 224000 hectares. Yield slumped to about 47 tons/hectare from about 62 tons/hectare reached during 1988-99-2000 (two seasons).
Intensive sugarcane crop sowing and harvesting was priority pursuit as a solution to ensuring survival of Sindh sugar industry.
It was also suggested that linkage between sugarcane and sugar price was necessary for protecting farmers and factories equitably. Likewise, sugarcane price needs to be linked with sucrose content to give impetus to development of appropriate quality and variety of sugarcane. This arrangement will infuse sugarcane development.
The FCC took note of these observations and agreed with the views expressed buy PSMA-SZ members. He was requested to forward the report, which he would be preparing, to PSMA-SZ to substantiate it as wholesome and before submission may hold another round of meeting with PSMA-SZ, for more clarity.