Cane growers demand fair prices
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LAHORE:
Pakistan's sugar sector mismanagement has sparked disappointment among sugarcane growers – called the real stakeholders – as the millers and middlemen are accused of exploitation, with support from prominent politicians.
A few politicians own sugar mills while the rest of the millers have close relationships with the political elite, creating a win-win situation for those who are behind sugar shortages despite availability of surplus quantities in the country. This year, the growers have also been deprived of the guaranteed support price for sugarcane from the government as, under an agreement with the International Monetary Fund (IMF), the sugar market, along with wheat, has to be deregulated. Initially, the growers in Punjab were offered a price of around Rs350 per 40 kg, which at the end of the season is hovering between Rs400 and Rs450.
"Sugarcane prices in Sindh are relatively high, the province has got a low yield and they are trying to get the desired quantity from Punjab," said an official of a Punjab-based sugar mill. "Growers were initially happy to fetch Rs400 per 40 kg, but as the crushing season is approaching its end, prices have been increased up to Rs460," he added.
However, a large percentage of sugarcane growers are still under pressure due to the decades-old culture of delay in payments from most of the mills. This culture has provided an opportunity to the middlemen to enhance their influence because they have the capacity to hold the sugarcane crop and the sweetener. "We work extremely hard in our fields in the hope of receiving a fair price for our produce, but what most of the millers do with us is painful," said Farooq Aziz, a grower from south Punjab.
The growers who have the capacity of loading their produce on tractor-trolleys and can wait for a long time before selling the harvest to the millers are also not happy. The millers often delay payments for months on excuses like high moisture content or weight disputes. "We have to knock on their doors for months before accepting lower prices after unjustified reductions," Aziz added.
On the other side, those growers who cannot afford this long process simply sell their crop to the middleman, who of course gives a much lesser price than the market value.
"Farmers have to feed their families, they have to purchase all inputs for the next crop and above all they have to pay off their debt. Nobody cares about these struggles," he said. As per official statistics, sugar production in 2024-25 is forecast to reach 6.8 million tons, 3% higher than 2023-24. This increase, according to the United States Department of Agriculture, is in line with population growth and demand from the food processing sector.
Yet, farmers' income has stagnated. Over 60% of sugarcane growers are small landholders with less than five acres, trapped in a cycle of debt and dependency.
The farmers argue they fail to keep pace with soaring input costs. Fertiliser prices have jumped 50% since 2022, diesel costs remain volatile and labour shortages plague harvests. On the other side, the middlemen take credit of facilitating the farmers by providing them with instant cash for their produce. If the farmers and millers are the visible players, the middlemen, or arthis as called in the local jargon, are the shadowy conductors. They bridge the gap between fields and factories.
"Without middlemen, the farmers cannot take their crop to the mills as we handle the logistics," remarked Raja Tariq, a middleman. "Farmers cannot transport cane themselves. We invest in trucks, pay bribe at check posts and manage risks. Our profit is justified," he argued. While the farmers, middlemen and millers have their own stories, there is another player, ie, the wholesaler or middleman of processed sugar. Government officials and market pundits normally attribute the ups and downs in sugar prices to these two elements because they believe they work together in many cases to create artificial shortage or surplus when the sugarcane crop is ready to harvest.
A former chairman of Pakistan Sugar Mills Association straightaway rejected the notion that the mills were responsible for creating artificial shortages. "We are living in an era of open market economy where prices are determined on the basis of demand and supply," said the PSMA representative. According to him, currently the retail price of sugar varies; in mega stores the price is around Rs150 per kg whereas in general stores, or grocery shops, the sweetener is available at Rs140.
"We cannot rule out illegal storage, but we, the millers, are not responsible for that, the real culprits are big wholesale dealers and government officials know them, this is an administrative issue, why the PSMA is always blamed," he asked. In such scenarios, reforms are often discussed by market analysts and government officials but are rarely implemented. Proposals include direct farmer-miller contracts to bypass the middlemen and subsidies for high-yielding seeds.
Some advocate for sugar taxation to fund farmer welfare schemes.
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