The deregulation of wheat can hardly be described as an unqualified success, most notably with the re-introduction of the government’s support price. Yet it is going to go ahead with a comprehensive deregulation of sugar, both growing and the industry. It is not doing so because it feels that this would be good for the consumer, or in any way help control the retail price of sugar, which has recently scaled new heights, but because the IMF has mandated that it be so. It should be kept in mind that sugar is a staple. Not only is it used as an ingredient in sweetmeats, both commercial and homemade, but it is the primary sweetener in drinks both hot and cold. It has been with difficulty that the country achieved autarky in its production, and it took well over three decades to end the rationing which had been introduced during World War II, Prepartition.
The proposed measures include allowing free exports, even though it has been observed in the past that allowing exports has meant shortages that have led to the retail price shooting up, and the need to import to end the shortage. The grower is now left at the mercy of the mills, with the price of cane to be determined purely by market forces, which will comprise on the one side a huge crowd of growers as sellers, and on the other a single mill as buyer. The present mechanism whereby a minimum support price is set, would be abolished. While the mills are to receive no export subsidy any longer, there is no longer to be any export quota.
There was the contretemps of the wheat deregulation, where first the minimum support price was first abolished, and then brought back, and there have been put in place no mechanisms to protect both grower and consumer from the effects of this policy. The government should realize that the new policy will reduce farmer’s incomes at the cost not of reduced retail prices, but heightened profits for sugar mills. Also, it cannot afford to have a sugar crisis which seems timed to occur just before the next election. Even though the retail price of sugar has reached the triple digits without provoking a public revulsion, it should not be forgotten that less than five decades ago, a sugar-price rise of four annas per kilo in 1968 provoked protests sweeping away the Ayub regime.
