Sindh's Agricultural Dilemma and Sugarcane Prices
Balancing Farmers' Struggles and Industrial Profits in Sindh's Sugar Industry
November 29, 2024
The sugarcane price controversy in Sindh exemplifies a larger fight between agricultural sustainability and industrial profitability in a turbulent economic climate. Diversification and simplifying export policies could address surplus issues while stabilising the domestic market. The Sindh government must strike a balance between farmers' economic well-being and miller profits to ensure market stability. Strengthening the financial backbone of sugarcane farmers through fair pricing policies is vital.
In an era of climate unpredictability and economic volatility, the sugar sector must balance supporting farmers while preserving industrial progress. Sindh may learn from Brazil's sugar sector, where diversification into ethanol and bioenergy has stabilised profitability and reduced market volatility.
Pricing Updates and Stakeholder Reactions
The Sindh government set the sugarcane price at Rs. 425 per 40 kg for the 2023-24 crushing season, causing debates among farmers and millers. Farmers demand Rs. 475 due to rising input costs and climate issues, while millers express concerns over profitability, stockpiles, and export uncertainties.
Farmers argue that the current rate does not cover rising costs, citing:
Rising Input Costs: fertiliser, diesel, and labour expenses continue to surge.
Climate Change Impacts: Unpredictable weather, especially the 2022 and 2023 floods, has reduced yields.
Delayed Crushing: Farmers report a 30–40% weight loss due to delayed operations.
🔗 Updated Reference: Farmers’ grievances regarding the delayed crushing season
Read more on The Express Tribune
Mills' Perspective
The Pakistan Sugar Mills Association (PSMA), while accepting the Rs. 425 price, highlights concerns over market saturation, export uncertainty, and fluctuating global prices. They urge synchronised policies with Punjab to maintain market uniformity.
🔗 Export Policy Update: The federal government allowed limited exports, but volatile global sugar prices have curtailed revenue opportunities. See the USDA 2024 Report.
Policy Recommendations
To address systemic flaws in Sindh's sugar industry, the following steps are recommended:
Timely Crushing Operations: Mills must begin crushing by November 1 to prevent weight losses.
Transparent Price Setting: An independent agricultural price board should set fair prices without external influences.
Diversification into Bioenergy: Encouraging ethanol and bioenergy production could enhance mill profitability and reduce reliance on sugar exports.
Strategic Export Policies: Simplifying procedures could address surplus issues while stabilising the domestic market.
Current Outlook for 2024-25
The Sindh government must aim for balanced pricing, potentially around Rs. 450-475, to mitigate farmers' hardships and support sustainable agricultural practices. Collaboration and timely enforcement remain crucial for long-term market stability.
Nothing for Sindh benefits until PPP in rule