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Increasing
sugar production
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By Dr Sardar Riaz A. Khan
THE minister for food, agriculture and livestock has asked the
sugar industry and farmers to optimize the cane and sugar
productivity as the country has a capacity to
produce 5.5 million tons of sugar per year with 77 mills all
across.
 Pakistan,
according to him, is producing enough to meet domestic
requirements and at times it has also exported sugar surplus.
This year, he said, the situation has
changed and the country is importing the commodity to bridge
the gap between the supply and demand.
The information shared by the minister is not correct as the
country is virtually importing sugar since its inception
barring early 80s when self- sufficiency in sugar was
achieved which could not last long.
Since 1985-86, imports have been resumed despite an increase
in the number of sugar mills from 41 to 77 during this period.
According to official data, the domestic
production of refined sugar was 3.5 million tons in 1997-98
and 1998-99, 3.6 million tons in 2002-03, and 3.99 million
tons in 2003-04, not enough to meet the domestic
needs.
The question is why did the government import the commodity
worth Rs1,686 million, Rs153 million, Rs153 million, and Rs189
million during these years, causing
unnecessary burden on the exchequer. Despite these imports,
the common man remained the sufferer due to uncontrolled hike
in its prices.
It is not understandable that despite the production of 3.25
million tons in 2000-01, excluding the previous year’s stock,
why the government had to import the commodity
worth Rs1,485 million. The reason could be the corrupt
bureaucracy and politicians in the government who take
commissions on the import of agricultural commodities rather
than making the country self–sufficient as in case the case of
India and other countries.
The ineptness of sugar policy is evident from the fact that
the government instead of meeting the domestic requirements
first and reserving some stock for lean years allows
the export of the commodity. It should export the surplus and
imports may be made when there is a deficit. The policy makers
on one hand import sugar while on the other
allow the industry to export the same every year. As a result,
the industry and exporters were able to earn Rs33,590 million
from 1993-94 to 2002-03 while the government
spent Rs29,158 million on imports during this period.
Not only that. The government spent Rs189 million on its
import during 2003-04 which is likely to increase. The country
has already imported 60,000 tons from China and the
Gulf States, and 50,000 tons from Brazil. The Trading
Corporation of Pakistan has been allowed to purchase 100,000
tons duty-free sugar from India out of which over 2000
tons is reported to have reached Lahore by September. India
expects Pakistan to buy between 300,000-500,000 tons in the
next couple of months.
The domestic production cost is high due to excessive cane
production cost (75 per cent of the total sugar production
cost) as compared to other countries. This is due to
low cane yield, low sucrose recovery percentage, high cost of
inputs, rising electricity and diesel charges, wrong support
pricing and policies, delay in payments to growers,
besides under weighing of their produce by the mills causing
them an additional loss.
The late start of crushing season i.e., in November by the
Pakistan Sugar mills Association (PSMA) does not permit timely
sowing of the following wheat or other crops. This
will reduce the yield which will cause further loss to
growers. As a result cane growers have shifted to other crops
resulting in the reduction of area from 1.1 million hectares
in 2002-03 to 0.95 million hectares in 2004-05 and a fall in
production from 52 million tons to about 45 million tons.
Furthermore, use of 25 per cent of the production for
seed, for making Shakkar (brown sugar) and gur has increased
to about 38 per cent which may further go up on account of
smuggling to Afghanistan and the Central Asian
States.
Nevertheless, the high sugar production cost has made it
difficult for the industry to compete with international
producers. Consequently, the political lobby of the PSMA
pressurizes the government to give subsidies up to 30 per cent
or more for enabling it to compete in the international
market. On the other hand, they demand increase in
duties on the imported stuff for competing in the domestic
market. This resulted in squeezing the growers and the common
man thus forcing duty free import of sugar.
The minister has asked the farmers and technologists to
increase cane productivity which will ultimately hike sugar
output. He should have realized that cane is a high water
requirement tropical and subtropical crop mostly grown in the
irrigated arid and semi-arid regions of Pakistan with no high
yield potentials. Water requirement for the annual
crop at the root zone is 71-acre inch, while that of ratoon or
perennial crop it varies from 80-100-acre inch per acre per
year.
Most of the growers have shifted to perennial crop due to high
cost of sowing annual crop and delayed payments by the mills
to growers. The yield of such ratoon crop
begins to decline after the second year but due to the
above-mentioned problems the majority of small farmers
continue to grow ratoon sugarcane crop for 3-5 years thus
seriously affecting the yield.
The situation is further compounded by water thefts by the
politically- influential feudal and politicians in connivance
with the concerned irrigation departments. These
problems may further force the growers to shift to other less
water requiring crops thus causing severe problems for the
industry which was expanded purely on political
influence rather than on sound economic parameters keeping in
view the future production potentials of the country.
Similarly, the cane breeders despite their extremely
non-congenial research environments have released a number of
high yielding and high sucrose percentage varieties. As
a result the average national yield per hectare of sugarcane
has increased from 30 tons in 1960 to 50.3 tons in 1997-98
which again in 2004-05 declined to 47.8 tons.
Even the highest average yield of 50.3 tons per hectare is 74
per cent less than the potentials demonstrated at farmers’
field by the FAO experts in Pakistan in 80s. All
these observations clearly support the view that the present
deplorable conditions and high sugar price is caused due to
aridity, high water requirements and
mismanagement by the policy makers whose ultimate sufferer is
the common man.
The minister has further stated that the government was
pursuing the production of sugar beet to fill the requirement
and production gap. The statement is questionable. For
example, despite various sugar beet development projects worth
millions of rupees, the highest area of 15,700 hectares under
sugar beet in 1980-81 has declined to 7,000
hectares by 2002-03 with a fall in production from 4,53,000
tons to 2,15,000 tons.
The major reason is that sugar beet is a Rabi crop which
competes with wheat, pulses, oilseed etc., during this season
when canal water supply declines. The water
requirement of 27-acre inch of sugar beet at the root zone is
higher than the major crops like wheat (19-acre inch), pulses
(12-acre inch), and rape and mustard (10-12 acre
inch).
Similarly, farmers prefer to grow Rabi vegetables which are
more economical than sugar beet. It is mostly grown in the
NWFP followed by Sindh, while it is not grown in
Punjab and Balochistan.
The policy makers, instead of making political statements must
realize the harsh realities at ground level. They should
seriously consider various alternatives as area under
sugarcane cannot be increased considerably in future due to
its high water requirements, high production cost, and delay
in payments to growers who are already shifting to
other crops. Thus, the policy makers should seriously consider
various alternatives to meet sugar requirements of the
increasing population. Some of which are given as
under:
If cost of imported duty-free sugar is lower than the domestic
production then the sugarcane area may be brought under wheat
plus cotton cropping systems. It will not only
save 38 per cent of the total water applied to sugarcane but
will produce an additional 2.25 million tons of wheat and
6,00,000 tons of cotton including 4,10,000 tons of
cottonseed. This additional production will not only make us
self-sufficient in wheat but will also help in saving billions
of rupees spent on imports.
Likewise, it will increase the profit by exporting cotton and
its bye-products. Extraction of edible oil from cotton seed
may further reduce the edible oil import bill. The savings
thus made could be used to import cheap sugar. Again, 38 per
cent saving in water could be used to increase area under
oilseed crops to further increase domestic
production of oilseeds and reduce its import bill. This is
just one example.
There are other cropping patterns that can replace sugarcane
and bring greater income to the reduce burden on national
exchequer and to control sugar price hike in the
interest of the common man by importing cheaper sugar. The
other option is that since the cost of sugarcane production is
very high, therefore, the economics of importing
raw sugar and its conversion to refined sugar within the
country be studied.
However, the ministers and the politicians who are owners of
sugar mills will never allow this change in sugar policy as
they did in the past because to them personal
interest is more supreme than the national and the common
man’s interests.
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Courtesy: The DAWN
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Pakissan.com;
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