Centre consented to sugar subsidy, Buzdar tells inquiry commission

ISLAMABAD: Punjab Chief Minister Usman Khan Buzdar has told the sugar inquiry commission that his government before taking any decision about sugar subsidy and export issue had consulted with the federal government.

Usman Buzdar, while appearing before the commission on Wednesday, said he had taken all stakeholders into confidence in the Centre before summoning first meeting on sugar subsidy issue on Oct 2, 2018.

"The Punjab government had taken opinion of mill owners (including Jahangir Khan Tareen, Hashim Jawan Bakht), four provincial ministers and growers' representatives either to give subsidy on sugar exports to millers in Oct 2018," revealed an official familiar with the content of Usman Buzdar’s response presented before the commission.

“After consulting the federal government, my cabinet decided to allocate Rs3 billion as a restricted subsidy for sugar mills owners,” the official quoted the chief minister as saying. The members of the commission asked him more than 10 main questions following some 20 subsidiary questions in around one and a half hour long meeting.

Punjab cabinet also debated this matter of subsidy on Dec 29, 2018 in Bahawalpur where it was decided that 15 sugar mills would get subsidy worth around Rs3 billion, Buzdar further revealed before the commission, added the sources.

Mills owners piled up pressure on his government by not kicking off crashing season on Nov 30, 2018, the scheduled time for cane crushing under Factor Act, Buzdar further narrated, adding that growers also protested against millers who continuously wanted a package from his government.

The chief minister further told the commission that four provincial ministers namely Agriculture Minister Noman Langrial, Minister for Industries Mian Aslam Iqbal, then food minister Samiullah Chaudhry and Irrigation Minister Mohsin Leghari were also part of a committee assigned to prepare its recommendation on this subsidy matter, sources familiar with the meeting said.

The millers were playing many tricks to gain maximum benefits both from the federal government as well as from the provincial government on name of welfare of growers who wanted early kicking of crushing season so that they could grow wheat crops, the chief minister further told the members.

Taking farmers' protest seriously, the Punjab government in light of provincial committee's recommendations wrote a letter to the federal government on Nov 30, 2018, seeking the latter's help to resolve the issue of growers and millers, Buzdar went on to say, according to sources.

Millers misled the government by showing fudging figures of 2mm ton surplus sugar in the country demanding for subsidy to export the extra sugar, Buzdar informed the commission.

Then his cabinet took up the subsidy issue in its meeting on December 20, 2018, Buzdar informed the commission, adding that the provincial cabinet also discussed the recommendations of Punjab food secretary carrying a summary on “subsidy on export of sugar”.

Then the Economic Coordination Committee (ECC) headed by the then finance minister Asad Umar took up this sugar subsidy and sugar export matters where the participants underscored the importance of providing relief to the farmers by ensuring start of crushing by sugar mills at the earliest. Asad Umar has already appeared before the commission and got recorded his statement.

Buzdar also told the commission that his government also informed the federal finance ministry about the growing tension between the growers and millers who put multiple demands for Punjab government. Then the federal government with some conditions let millers export 1mmt sugar leaving freight matters on provinces, Buzdar further said, according to sources.

The chief minister also revealed the facts of pledging subsidy after deliberating all the rules and conditions with his cabinet. The proposal of releasing total subsidy outlay’s limit to Rs3 billion was also discussed linking it with restricting the export limit for Punjab to 52 percent of total exports.