We refer to the 'Recorder Report' appearing in June 09, 2004 edition of the Daily Business Recorder, carried on the back page, titled 'Mills not yet paid quality premium to cane growers'.
Contents of the news item are absolutely misleading, abundantly incorrect and tend to be a product of total ignorance of the scribe. We regret such a disturbing feature appearing so often, carrying totally distortional expressions, instead of caring for factual and impartial reporting, which forms the ethics for good journalism. We regret the fact that a newspaper, having regard for factual reporting, can carry a news report based on ignorance!
We reiterate that a case against the legality of quality premium is in the Supreme Court of Pakistan, awaiting judgement. This fact has been conveyed to you more than once. Hence payment of QP cannot be a pre-condition to the procurement of sugar by the Trading Corporation of Pakistan (TCP) in compliance with a decision by the government of Pakistan, arrived after thoughtful deliberations for a long time. Besides the suit, QP is an administrative demand solely of the Sindh provincial government, creating unwarranted disparity in the structure of cost of sales of sugar, since about 70 percent of the national sugar production the rollout remains free from its demand.
Time and again, reports are flashed by twisting the facts about sugar exports and the consequent 'huge' loss to be borne by the exchequer etc. Of the total global sugar production, aggregate at about 150 million tons, please take careful note, a fraction in the range of five to 10 percent enters the external trade circuit. Each sugar exporting country subsidises it. Pakistan cannot swim in isolation against tides flow.
External trade tariffs governing imports and exports are be designed to protect the national economic interests and tend to tilt the balance in favour. In the external trade of Pakistan, in aggregate above $20 billion, sugar is a small component. It cannot be made a big fry in destabilising the national budget on facilitation of sugar exports!
Another point to observe of your scribe's gross ignorance or deliberate indulgence in falsifying factual position and opting for biased reporting, if he is aware of the facts, is that sugar procurement by the GoP is to rescue the sugar industry. The arrangement hammered out of TCP procurement, of course, after protracted tripartite parleys among GoP, sugarcane farmers and sugar industry is precisely meant to extend support to the sugarcane farmers to get funds. Only those ignorant of 'sugaronomics' can dub it as a rescue for the sugar industry.
Cost of sugar production and sugar sales price lack being linked by a properly tuned policy framework. Sugarcane support price is fixed by the GoP at the basis of cost of production, assessed critically by the Agricultural Price Commission plus farmers' economic returns.
Price of end product sugar is left the vagaries of the market forces and that too in surplus situation. It is destroyed in event of sugar shortage by liberally dumped imports.
In fact, the current distress of the sugar industry is a legacy of such policy and its uncalled for additional import of 632,645 tonnes of sugar in 2000-01. Subsequently there has been a consistent rise in national sugar production, being 3.249 mln tonnes in 2001.02, 3.652 mln tonnes in 2002-03 and a record at four million plus in 2003-04 creating mounting surplus of 637,149 tonnes, 759,103 tonnes and 1,359,053 mln tonnes of sugar respectively of the latest three years in sequence.
It is imperative for a proper economic equation to safeguard the sugar industry's smooth sailing. It can be had by creating a firm linkage between cost of sugar production arid sugar sales price, either by inductive or deductive method, as the major 10 sugar producing and exporting countries manage.
Your reports, time and again, do not realise the gravity of the situation, consistently blaming the sugar industry for the problems in sugar sub-sector. Had it really been so, the GoP would have ignored the efforts to save the situation. If such a simple matter is not understood, you can judge on what merit such a report can be carried and quality of its being true and reliable.
This rejoinder should give readers the correct perspective of the situation.
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