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Business Recorder

Published Date: Jul 4, 2012

SUGAR MILLS EXPLOITING FARMING COMMUNITY: SDPI REPORT

The country’s farming community is being exploited by the sugar mills through irregular practices like low and fixed rates of the crop, illegal deductions, restriction to the market and unjust buying terms and conditions. This was revealed in a report ‘Corporate Social Responsibility (CSR): Studying the Sugar Production Process in Pakistan’, launched by Sustainable Development Policy Institute (SDPI) on Tuesday.

According to the report the country’s farming community is being crushed by the sugar mills through exploitative practices including low and fixed rates of the crop, illegal deductions, restriction to the market and unjust buying terms and conditions.

National Sugar Policy 2009-2010 aims at ensuring sugar supply to consumers at a competitive price and providing a fair deal to the producers and growers as well as educating farmers about the new and innovative techniques to enhance productivity. Unfortunately, no awareness session or training workshops have been arranged regarding the sugar policy, the report says.

It says that very few farmers are loyal to the specific mills, most farmers opt to sell their stock to the mill which offers them easy passageway, prompt payment and better rate. The farmers have battered and bruised feelings due to delay in payment and deductions. Legally, a farmer can move the cane commissioner or provincial cane commissioner against non-payment by a mill. However, no mechanism exists for the implementation of this law. If a factory does not release the payment to the farmer after one year of the order, the commissioner can send the case to civil judge or magistrate after imposing 11 time fine on the outstanding amount against the factory.

According to the report the farmer community voiced that the government is responsible for their problems and the government is not protecting them from exploitative and unjust policies and action of the sugar mills. The mills are legally bound to start purchasing and crushing from October 1 to November 30. However the millers prefer a delayed start so that cane weight is reduced due to drying, leaving behind high sugar content.

Jahangir Khan Tareen, a senior politician, Shaista Sohail, Joint Secretary, Ministry of Industries and Production, Shaista Bano, Director, Competition Commission of Pakistan, Shafqat Munir, Co-ordinator Asia Rights in Crisis, Oxfam, Iskander Khan, Ex-Chairman, Pakistan Sugar Mills Association (PSMA), Muhammad Imran, Director, Corporate Social Responsibility Centre Pakistan, Dr Abid Suleri, Executive Director, SDPI, Qasim Ali Shah, Director Programme Development, SDPI and Anam A Khan, Research Associate, SDPI spoke on the occasion.

Tareen said that the corporate sector needed to transform itself as socially responsible business entities for pro-poor growth and overall welfare of the society. “Thinking socially and ensuring the well-being of the stakeholders has the potential for a successful business,” he said. He also shared the business model of his sugar mill in which he has integrated a business strategy with welfare of sugarcane farmers through micro credit and technical support. He said that he also provided technical agricultural support by providing funds to farmers for deep well turbine pumps, building schools and access roads, establishing eye camps in rural communities and providing artificial limbs for disabled people.

Anam Anwar Khan, the author of the report, said that the sugar industry was the second largest industry of Pakistan, employing 1.5 million people. Imran Khan informed the participants on the concepts of philanthropy and corporate social responsibility (CRS). He said CSR was the effort undertaken to improve wellbeing of humankind by solving social problems. “CRS is not just to create goodwill but under CRS a company can also conduct energy conservation, protection of environment, protection of child labour and water treatment,” he said.

Iskander Khan urged the Competition Commission of Pakistan to play its role to end exploitation of farmers and consumers by sugar mills. He lamented that the sugar industry was still regulated through sugar management act 1950 and called upon the authorities to come up with a policy intervention to address gross irregularities in the sector.

Shafqat Munir discussed trilateral approach of CSR involving government, corporate sector and civil society for effective implementation of the concept of corporate social responsibility. He also proposed CSR certification for corporate enterprises. Shaista Bano said that compliance of rules, regulation and law is pre-requisite for companies besides performing social welfare intervention. Conducting social welfare activities on one hand and involvement in hoarding, not paying tax on the other hand is violation of rules and regulations, she said.