The Federal Government has started considering using Cane Purchase Receipts (CPR) as cheques to ensure payment to the growers, sources in the Ministry of Industries told Business Recorder.

The Cabinet had approved Sugar Policy 2009-12 in September 2009 but it has not been implemented due to undue influence of different powerful lobbies.

Recently, the government decided to procure 478,000 tons sugar from sugar mills, aimed at early payment to the growers, of which 378,000 tons has already been contracted by the Trading Corporation of Pakistan (TCP), a subsidiary of the Commerce Ministry.

TCP has, however, failed to clear payments to mills which ultimately is meant for growers as per the instructions of Economic Co-ordination Committee (ECC) of the Cabinet.

Pakistan Sugar Mills Association (PSMA), sources said, took the matter up at the highest level in the government after which TCP started payments, but majority of mills are yet to be paid.

Sources said that this issue of non-payment to growers came under discussion in the Federal Cabinet meeting on February 1, 2012 when the Secretary Cabinet tabled the minutes of the Economic Co-ordination Committee(ECC) of the Cabinet meeting held on January 20, 2012.

Some Cabinet members expressed concern that growers were not being paid because of mills' financial constraints.

After hearing the views of Cabinet colleagues, the Prime Minister decided that to ensure timely payment to the growers, Advisor to Prime Minister on Law along with Secretaries of Finance and Industries will examine the issue of feasibility of CPR mechanism to be converted into cheques in consultation with stakeholders (sugarcane growers/owners etc) and formulate recommendations.

A sugarcane grower told this scribe that those growers who are selling cane to mills at Rs 150 per 40 kg, fixed by the government, have to wait for two months for payment.

Sources said that Punjab Chief Minister Shahbaz Sharif, who had attended the Cabinet meeting in 2009, had proposed that the sugar content (sucrose) be made the criterion for determining sugarcane price to protect the farmers against exploitation.

PSMA Chairman Javed Kayani, as Chairman of PSMA Punjab, had taken Chief Minister Punjab on board on his proposal to link sugarcane recovery with its price to reward the progressive growers and to promote variety in sugarcane in the Province.

As a consequence, Punjab Government took the lead and issued a notification in this regard during the last crushing season.

But unfortunately the lobby of sugar mills located in the southern Punjab were able to get an injunction against this notification in Lahore High Court on what is alleged as frivolous grounds.

The meeting also discussed sharing of work done on linking the price of sugarcane to sucrose content.

The committee was briefed on declaring the Cane Purchase Receipt (CPR) as a negotiable instrument like a cheque.

In October 26, 2010, former Minister for Industries and Production, Hazar Khan Bijarani, had held a meeting of Sugar Advisory Board (SAB) wherein there was a general consensus that CPR, being given to the growers, should be treated as a cheque.

According to sources, sugar policy, approved by the Cabinet, agreed that CPR be declared as a negotiable instrument.

However, it has yet to be decided as to which legal form (cheque, bill of exchange, promissory note, etc) CPR will be transformed into.

SAB, two years ago, had directed to finalise an implementation mechanism on CPR and it was decided that all stakeholders will forward recommendations/proposals regarding the above-mentioned issue which will serve as basis for further discussion.

It is learnt that PSMA is doing its best to promote variety sugarcane and has also signed an MoU with Mauritius Sugar Industry Research Institute and has again approached the Government of Punjab to allocate funds collected through road cess and to manage Ayub Research Agriculture Institute by appointing a CEO from Mauritius.

Copyright Business Recorder, 2012

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