ISLAMABAD (January 02 2004): The Pakistan Sugar Mills Association (PSMA), Punjab zone has proposed that the Punjab government should follow India as a role model to workout an effective mechanism to sort out problems of sugar industry at the provincial level.

PSMA Punjab Zone Chairman, Javed Kayani, who had submitted to the Punjab government the proposal of setting-up an effective mechanism at provincial level, as was the practice in India to protect all the stakeholders of the sugar sector, claimed in his telephonic talk with Business Recorder on Thursday that the new set up could help make quick decisions and save the industry from complete collapse.

He said the PSMA Punjab Zone was expecting positive response from the provincial government for the proposal as the Chief Minister Punjab Chaudhry Pervaiz Ellahi and his team was fully aware of the issue and was fully capable of sorting out such chronic issues.

Kayani argued that his proposed model could ensure a level-playing field to all the stakeholders. He believes that once the Punjab government comes up with the idea of taking-up and sorting issues of the sugar sector at provincial level it would set healthy precedent for other provinces.

Kayani argued that the policy of deciding problems of sugar sector at the federal level has played havoc to in the industry and its continuity would result in complete collapse and add to the woes of the all important stakeholders of the sectors.

Kayani said that sugar is a provincial subject and problems faced by its stakeholders can be solved at the provincial level more effectively. He refers the case of the Trading Corporation of Pakistan's (TCP), which was asked by the federal government to intervene into the market by lifting substantial commodity to provide remedy to the mill owners who have huge surplus stocks in hand. Kayani added that TCP's failure in bailing out sugar industry supports his point of view and increases manifolds the need of working out mechanism at the provincial level.

The PSMA Punjab Zone chairman is convinced that the efforts being made at the federal level were major cause of delay in solution to the problem.

He refers the case of wheat for which the provincial government makes arrangements and lift up big quantity to ensure better prices to the growers.

Kayani said "My proposal of handing sugar at provincial level is in line with the government policy. All what I have suggested is to find solution to the problems of sugar sector at provincial level as was being done in the case of wheat".

Kayani said that the mill owners wanted good return to the growers for their crop so that mill owner - grower relationships could go for long time but such ideal situation was not possible in the present crisis like situation when sugar prices were touching the lowest ebb.

He said that the reasonable price of sugar could be the best mode to ensure better price of sugarcane to the growers.

In Kayani's opinion, ex-factory price of Rs 20 per kg could be the reasonable level for sugar to ensure good return to all the stakeholders.

Ex-factory Sugar price was ranging between Rs 17 and Rs 18 per kg, which dipped to Rs 15 and in the case of some mills which were not financially sound to Rs 14.50 per kg with the beginning of fresh crushing.

The mill owners have been demanding of the government to move in to keep commodity prices at a reasonable level so that industry could keep the ball rolling.

Kayani recalls the situation saying "All our calls for immediate solution to the problems have gone unnoticed and we believe this policy can not go for long". He termed it as an alarming situation and linked solution to the implementation of his formula of sorting out problem at provincial level.

Courtesy Business Recorder