The sweet smell of patronage

EDITORIAL: The federal government’s latest decision to permit exports of surplus sugar, accompanied by assurances that domestic consumers will be protected, has an unmistakably familiar ring. Deputy Prime Minister Ishaq Dar has directed the authorities to maintain strategic reserves, ensure market stability and prevent increases in retail prices.

The Cabinet Committee on the Export of Surplus Sugar has apparently examined stock and domestic requirements before clearing the way. All the appropriate safeguards have been promised, just as they have been during previous episodes of Pakistan’s remarkably repetitive sugar policy.

The trouble is that Pakistan has repeatedly demonstrated how easily the pursuit of sugar exports can turn into a costly exercise in economic self-harm. Export permissions, sometimes accompanied by subsidies or other concessions, have been followed in earlier cycles by domestic shortages, rising prices and the need to arrange expensive imports. The country earns foreign exchange by sending sugar abroad, only to spend scarce dollars bringing it back when domestic supplies tighten.

The absurdity would be difficult to improve upon even if policymakers were deliberately attempting to design a system that defeats its own stated objectives.

Yet the cycle persists because sugar occupies a privileged position in Pakistan’s political economy. The industry’s ownership has long included influential political families and individuals with considerable access to the corridors of power. This creates an obvious conflict of interest whenever decisions concerning production, pricing, exports, imports, and subsidies come before the government.

The beneficiaries of favourable policy are frequently far better organised and politically connected than the millions of consumers who ultimately bear the consequences of its failures.

The distortions begin well before sugar reaches the mills. Sugarcane cultivation places substantial demands on land and water, particularly in a country already confronting serious water stress and agricultural productivity challenges. Political and regulatory incentives favouring the crop have helped sustain a production structure whose broader economic costs receive insufficient attention.

Land, irrigation resources and public policy are drawn towards an industry with powerful patrons, while competing crops and the wider agricultural economy must contend with the consequences. The question whether this allocation serves national agricultural priorities deserves considerably more scrutiny than it receives.

There is also something deeply revealing about the government’s confidence that administrative instructions can prevent market pressures from materialising. Strategic reserves are certainly necessary, and genuinely surplus production can legitimately be exported.

But estimates of availability must withstand independent scrutiny, account for consumption and seasonal uncertainties, and be supported by credible stock verification. An assurance from a cabinet committee cannot substitute for transparent figures, enforceable conditions and a clear mechanism for suspending exports if domestic supplies begin to tighten.

The government should therefore publish the stock assessments, projected domestic requirements, reserve commitments and export quantities underpinning its decision. It should also make clear whether exporters will receive any direct or indirect financial concessions, and how compliance will be monitored.

Such disclosures would allow the public to judge whether the decision rests on a genuine surplus or another optimistic calculation whose costs may emerge later. Given the industry’s political connections and the country’s experience with sugar-market disruptions, public scepticism is entirely justified.

Ultimately, Pakistan’s sugar problem extends beyond the arithmetic of one export season. Successive governments have allowed commercial interests with substantial political influence to shape decisions that ought to reflect food security, efficient resource allocation and consumer welfare.

The resulting policy instability has repeatedly undermined confidence in official assurances. Until those conflicts are confronted and the industry’s privileged treatment is subjected to serious reform, every fresh promise of safeguards will invite the same uncomfortable question: whose interests are being safeguarded?

There is an old observation that sugar remains in power in Pakistan regardless of which political party forms the government. The latest export decision offers little reason to retire it.

Copyright Business Recorder, 2026