December 17, 2010

Mills facing cane shortage

Mills facing cane shortage
December 13, 2010 (4 days ago)
By Tahir Ali

IT is not a good sight that the yard of Asia’s biggest sugar mill –the Premier Sugar Mill, Mardan— and roads surrounding it, that would have mile-long queue of cane-carrying trolleys and trucks a few years ago, has only a few of them. The mill is getting a paltry supply of cane.

Officials at the PSM say they increased the price of cane and ensured prompt payment, expecting that the two measures would improve cane supply position to the mill but the growers did not respond.

They maintain that the PSM increased cane price from support price of Rs125 to Rs240 per 40kg to receive better supplies.

Masood Khan, cane manager at the PSM, said increase in cane price had not boosted supply of cane to the mill as expected. “Farmers wanted prompt payment and good returns on the crop. We have increased the price and are paying them within three days. But still the supply is not enough to run the mill.

He said: “We are running the mill intermittently for 8-10 hours a day or even after a break of a day so that enough stock is accumulated for crushing.”

“Our cost of production per kilo has increased to Rs75-78, which means sugar should be sold at Rs80-85 per kg. However, the prices are coming down, making the position of mills unstable,” he added.

According to him, less supply of cane means intermittent running of mills, which increases cost of production, especially in the event of higher prices to farmers, high wages offered to employees, burgeoning fuel prices and various taxes.

“Conversely, gur has no such taxes and burdens. Why won’t it compete with us? Its prices have increased tremendously and it is sold around Rs80-90 a kilo. To enable us to compete with it, we must be given subsidised fuel, power and relief in taxes. Or else gur making should be banned altogether,” he argued.

Haji Niamat Shah, senior vice president of Anjuman-e-Kashtkaran, Khyber Paktunkhwa, also said the government should announce a relief package and a rebate in taxes for Khyber Pakhtunkhwa sugar industry.

Abdur Rasheed, another official at the PSM, said the mill would daily crush around 100,000 maunds of cane five years ago but it was crushing only 20 per cent of the quantity these days.

Welcoming increase in cane price, Shah hoped farmers would grow more cane next year. Increased price would ensure the pledged and continuous crushing at the mills producing more sugar, save jobs of thousands of mill employees, who are laid-off when mills are closed, and help reduce prices of sugar in the country,” he said.

The new price would appeal farmers who make gur through rented gur-ganees. “But I think those with their own gur-ganees will still feel like making gur from their crop,” he opined.

“The new price may not improve cane supply to mills but it speaks volumes of the government’s indifference and lack of information on the ground situation. Look at the price fixed by the government and the one offered by the mills,” said a farmer.

The estimated production of sugarcane in Khyber Pakhtunkhwa is 1.3 million tons. It can produce up to 100,000 tons of sugar if farmers start bringing their crop to mills for crushing instead of making gur.

Ban on movement of gur to seven federally-administered tribal areas and their six provincial counter parts have caused a fall in its demand and as a result the prices have come down by about 20-30 per cent, but farmers are still going for it.

The gur-makers are alleged to have purchased standing crops from farmers and made advance payments to them for the gur they produce, according to a source. According to him, generator-run modern gur-ganees are consuming cane faster than in the past.

To get adequate supplies, the sugar millers will have to enter into contracts with farmers for purchasing their crop at fixed/better price, and a surety for prompt even advance payments before or after cultivation, but much earlier than harvesting.

There should also be a minimum price for certain fixed sugar-content, but farmers should receive a premium price for more sugar-content in their crop.

Investment in research for better varieties of sugarcane and improvement in per acre yield with better sugar recoveries is also required.

Pakistan is the sixth biggest sugarcane producer in the world but is ranks 15th both in cane and sugar yield.

October 25, 2010

DAWN.COM | Economic & Business | Khyber Pakhtunkhwa farmers await relief

DAWN.COM | Economic & Business | Khyber Pakhtunkhwa farmers await relief
Khyber Pakhtunkhwa farmers await relief
By Tahir Ali
Monday, 25 Oct, 2010

PADDY growers in Khyber Pakhtunkhwa, particularly in Malakand division, hit hard by floods and soil erosion, are waiting for government support.

The loss to rice crop and land, farmers say, carries risks of food security, price-hike, decreased exports, low incomes and increased poverty. The worst hit are the subsistence farmers.

The government would have to reclaim the fields and canals to facilitate cultivation of Rabi crop. KP agriculture minister has said the provincial administration would do everything possible to reclaim the 35,000 acres which had been rendered uncultivable by the floods. But farmers are skeptical of seeing it done any time soon as the task requires huge funds, machinery, personnel and strong commitment on the part of the government.

Abdur Rahim Khan, secretary general of the KP chamber of agriculture, said rice farmers were badly hit. “They should be provided free or subsidised agriculture inputs. Their agriculture loans should be written off or at least the interest thereon should be waived. Easy farm and non-farm loans to small farmers should also be arranged,” he said.

The Food and Agriculture Organisation says rice is the worst-hit crop in KP. An official from the agriculture ministry said 71 per cent rice crop standing over 55,000 acres was washed away by floods, inflicting loss of over Rs2 billion to farmers. The loss will have serious implications for the impoverished farmers.

Four districts of Malakand division - Swat, Dir upper and lower and Malakand - were home to 68,000 acres or 88 per cent of province-wide paddy crop. But the destroyed crop of Malakand Division constituted 95 per cent of the total devastated crop. The floods also washed away 90 per cent of paddy crop in Peshawar, Nowshera and Charsadda but due to mere cumulative acreage of around 1,500 acres, its impact was very little.

“Around 35,000 acres in Swat and Dir districts have been rendered uncultivable by around three feet of sand and mud and concentration of pebbles and stones. While the loss of standing crops is also huge, the soil-erosion caused by the floods has been especially horrific. The affected farmers need immediate relief,” said Muhammad Khan, a resident of Batkhela.

Rice is of an important diet for people in MD who use Begumay variety in their evening meals daily.

“Rice is the favourite food and one of the biggest businesses of farmers in Swat, Malakand, lower/upper Dir and Chitral. The low-intensity monsoon floods in the last century had made this land more fertile and suitable for growing rice. Unfortunately, the mud layer is no more there on the fields situated on river banks. It will take 15 to 20 years to spread another layer of fertile mud over the bald land surface,” he added.

Muhammad Naeem from Swat said rice fields on river and stream banks in Dir, Swat and Chitral have been made uncultivable by floods. “Floods have eroded vast lands. I have lost paddy crop on 102 canals on my land. Rich farmers may bear the loss but where will the poor go? They need immediate relief and a vigorous rehabilitation plan and immediate reclamation of their lands,” he said.

“While rice crop in other areas has matured and is being harvested, it is still unripe in Malakand Division and the government should work closely with farmers to save the crop,” added Naeem.

For lack of rice mills in the area, most of the work in different phases of paddy cultivation, harvesting and milling are done manually. It consumes more time, energy, resources and lessens the profit margin for growers.

Haji Niamat Shah, a farmer leader in KP, said per acre yield in most of KP was just around 400kg which was less than the potential of 800kg. “This is because no quality local/hybrid paddy seed is provided to farmers. While the crop requires abundant water, the destruction of irrigation network and soil erosion in the area means still lesser per acre yield in the region,” he said.

Rice growers also face shortage of paddy seed for next year crop as a huge quantity of their stored seed was washed away by the floods.

“The KP seed industry should provide the far

October 18, 2010

DAWN.COM | Economic & Business | Boosting pharma exports

DAWN.COM | Economic & Business | Boosting pharma exports
Boosting pharma exports
By Tahir Ali
Monday, 18 Oct, 2010 | 01:14 AM PST |

PAKISTAN’S low exports of pharmaceutical products at about $100 million can be significantly increased provided the local pharma sector is given incentives and relieved of regulatory burdens, industry sources say.

Though pharmaceutical exports have become the seventh largest manufacturing-based export segment, highest infrastructure and operating cost, inconsistent government policies, high duties, lack of research and development facilities, high interest rates, energy shortage and the poor security situation have obstructed efforts to raise exports to their potential.

Khalid Mehmood, chief executive of a national pharmaceutical company says the pharma industry was made to pay one per cent of its profit before tax (PBT) for the central research fund (CRF).

“We have been paying CRF for years without getting a single short or long-term benefit. No such thing is being levied on any other industry. Conversely, they are given support for setting up laboratories and R&D centres. The CRF must be eliminated if the industry has to grow,” he said.

Export insurance policy is required for protecting exporters from payment risks. While governments of the competing countries have devised protection mechanisms for their exporters, Pakistan has not. This should be done immediately,” he added.

Exports of pharmaceuticals are dependent on the capability of the manufacturer to obtain certification from WHO and other regulatory agencies of the importing countries.

“A pharmaceutical facility to qualify for accreditation by these agencies, requires at least Rs3-5 billion of capital expenditures and Rs200-300 million of operating expenses annually. This necessitates huge capital and profitability for the company,” he said.

“To be able to do that, prices of medicines should be deregulated. Ever since the Indian and the Bangladeshi authorities have done that, manufacturing plants in India and Bangladesh have gone up to 90 and four respectively while none has been set up in Pakistan, ” he informed.

Pakistan’s pharmaceutical exports are just around $100 million as against India’s exports of $11 billion which are expected to surge to $40bn by 2012.

To the fear that deregulation will increase the prices of medicines, he said, essential drugs, recommended by the WHO, should be regulated and their prices controlled. “This is being done in India and Bangladesh where only 74 and 109 molecules are on the controlled list of drugs. For all other products, the price is deregulated. Standard pricing should be adopted in the country,” said another expert.

“Some importing countries require a certificate of prices from the exporting country to establish price for imports. It harms exporters who cannot charge the higher prices prevailing in the external markets as the prices of drugs are low here and are mentioned on the registration letter. Higher price certificates should be provided to exporters only for exports,” he suggested.

Sources said exports can be increased if the quality of the products and the country’s regulatory framework are in line with the global and regional practices. “Drug regulatory requirements must be harmonised with those in ASEAN region provided prices of locally manufactured drugs are increased to their level and are deregulated. But how does Pakistan formulate a regulatory policy which is in line with the international best practices and yet it does not penalise the industry? One way is to form a pharmaceutical regulatory authority,” he suggested.

Pharmaceutical exporters need one-window fast-track facility.

“About seven days and sometimes weeks, are required for getting NOC for a consignment. Exporters would greatly benefit if one-window operation for export clearances and to expedite drug registration and clearance process is introduced,” he added.

The pharma industry also complains they have to pay five per cent workers’ profit participation fund (WPPF), and two per cent workers’ welfare fund (WWF). “Though it was meant for benefiting workers, they have least benefited from it. Industries in other countries are not taxed with the WPPF or the WWF. These should be eliminated as the tax slabs for the industry are already the highest in the world- around 35 per cent. On an emergency basis, at least the export revenue should be exempted from the two levies,” he added.

The industry will also benefit if the export freight subsidy (EFS) is introduced for it. “The EFS has been introduced for other industries in the trade policy but pharma industry has been ignored. Export development surcharge at 0.25 per cent should also be withdrawn immediately. Export refinance facility is currently in the ratio of 2:1. Performance requirement should be 1:1 as a number of countries in the region have this facility,” he desired.

As per regulation of State Bank of Pakistan vide circular No15 of August 15,, 2003 and subsequent circular No.9 of August 28, 2008, every exporting pharma company can retain 15 per cent of its sales proceeds in foreign currency account which can subsequently be used for foreign remittances and reimbursement of expenses etc.

“It is impossible to cater to huge international expenses with this amount. This is practically impossible in the initial years when expenses are high as against returns. Hence retention from 30—40 and 25—30 per cent of sales proceeds should be allowed for an exporting company having sales up to $10 million and more than $10 million respectively. This extension will not only help local exporters compete and survive in international market but also boost their exports,” he added.

As per regulation of FBR vide Sec No 152 (2), reimbursement of expenses by an exporting company to its representative office abroad is subjected to withholding tax at the rate of 30 per cent on every payment and in the case of double taxation treaty between Pakistan and exporting country, at 15 per cent of payment.

“Being reimbursement of expenses, these payments should be exempted from withholding tax and an appropriate provision be inserted in relevant section of the income tax ordinance to this effect,” he argued.

Pharmaceutical industry is providing direct and indirect employment to nearly four million people. It fulfills over 90 per cent of the country’s drug requirements. It saves huge foreign exchange as only less than 10 per cent of the medicines need to be imported. And it is fast moving towards 100 per cent self-sufficiency.

September 21, 2010

Wheat seeds shortage feared in KPK

Wheat seeds shortage in KPK
By Tahir Ali
(DAWN Monday, 20 Sep, 2010)
WITH the wheat sowing season to commence next month, farmers in Khyber Pakhtunkhwa anticipate an acute shortage of seeds. They fear that if the issue is not tackled soon, it will severely damage the crop prospects.

They want the federal and provincial governments and the international community to come to the rescue of the badly hit growers for whom the coming Rabi crop constitutes a first step towards their ultimate rehabilitation.

The Food and Agriculture Organisation (FAO) has also warned that farmers in KP may not be able to plant wheat because of non-availability of quality seed and other needed inputs. Failure to provide time-critical inputs could reduce wheat yields, it fears.

Realising the potential seed shortage, the government has asked district agriculture officials to buy even the wheat meant for food.

“Normally wheat food grain is not utilised for sowing. But as seed shortage is feared, the director-general agricultural extension, KP, has asked all districts to buy as much of the commodity as possible,” says an official.

Though officials are confident there would be no shortage of seed, farmers fear its scarcity in coming weeks.

“Enough quantity and a robust system of distribution must be arranged in emergency,” said Niamat Shah Sawal Dher, general secretary of the Anjuman-e-Kashtkaran of Khyber Pakhtunkhwa.

Shah feared that millions of acres of irrigated land may be left barren if seed was not arranged in time. “With the Pirsabaq’s seeds research farm, public seeds industry and private seed stocks having been mostly destroyed by floods, KP is almost certain to face wheat seed shortage. The government should quickly import standard certified seeds to fill the gap,” he said.

“There are also reports that the government wants to utilise food standard wheat as seeds in wake of shortage. This is not a right choice,” Shah added.

Murad Ali Khan, the president of the Kissan Board Pakistan, said “We will like the government to provide seed free of cost to flood-hit farmers.”

Muhammad Zahir Khan, a farmers’ leader, said Charsadda farmers have lost wheat seed stored in their homes. “The government and farmers organisations should sit together to chalk out a strategy as to what should be done to ensure a bumper wheat crop. Wheat sowing is at hand, but there is neither any compensation nor free seed or other inputs for the growers despite promises. I am worried how will farmers pay their agricultural debts, buy inputs and feed their families when they won’t be able to sow wheat,” she said.

Bakht Biland Khan, general secretary of Kissan Board, Swat, also asked for relief . “While we know Swat is not the only place to have been hit by flood but we do deserve more attention as we have been devastated first by militancy and then by floods. Swat farmers are mostly poor who own an acre of land and have no money to buy inputs. We deserve to be compensated for our losses and must be given free seed and money to buy farm inputs and reclaim our fields,” he said.

A senior official said: “We will shortly take up the issue with the federal government. The provincial food department has also enough wheat stock that can be used as seed. Private seed companies will also be procuring the commodity. We also intend to buy seed from Punjab and have already bought 2,000 tons of it. Though at present we have only a small quantity of the required seed, it is hoped that by the start of the wheat sowing season, the problem will be solved,” he added. But this, others fear, may not be the case.

The KP uses about 1.9 million acres for wheat cultivation. The provincial seeds industry provides 10 per cent of the total wheat seeds requirement of 80,000 metric tons to farmers.

This year the demand for wheat seed has increased. In the past, 70 per cent of the KP farmers used their own stock while the rest bought seeds. Now as floods have destroyed wheat stocks in Charasadda, Nowshera and the DIK and Lakki Marwat, the government will have to provide seeds to more farmers.

Recent flash floods have dealt severe blows to agriculture in Peshawar valley, Malakand division and southern parts of the province.

The FAO, provincial Reconstruction, Rehabilitation and Settlement Authority and some local and international non-governmental organisations are planning to provide farm inputs to farmers on a limited scale. It means a large number of affected farmers will not benefit from the plan and will be left out.

September 8, 2010

Liberalism of the chattering classes

This class wants democracy. Who doesn't? But do these sophists understand how democracy functions. Not really. They are wealthy, sophisticated, educated and call themselves the intelligentsia. They live in an air-controlled environment and party at will, partaking of the good things of life, some forbidden, but readily available if you pay the cash. Where is this claque of democracy lovers now when the great deluge has drowned the life of the poor? Has any fat cat gone hungry; thirsty; homeless? Or lost his/her designer wardrobe to the Great Flood? Or fallen victim to diarrhoea, nausea, malnutrition, dehydration, cholera, even death?
Has this cavalier class created some kind of collective synergy, a formula to face the aftermath? To organise cadres of volunteers overseeing the relief? To question who is the national bursar? Imran Khan and a few others are exemplars. They have produced concrete results.
The word 'democracy' is a shrill cliché in our part of the world. Ruling politicians swear they want to save democracy (from whom?). High-powered journalists bandy the word. Members of civil society especially those running foreign-funded non-governmental organisations lecture us on its worth. Instead of homilies, where can one find a sober voice of reason/ analyst/ expert who can guide the way to a workable democracy, not the one where corruption by the rulers is condoned and criminal neglect by the decision-makers ignored. Has any scofflaw, the politician who let their people drown to save their lands during the flood been hauled up?
Is Chief Justice Iftikhar Chaudhry now holding the additional portfolio of commander-in-chief of accountability?
Nobody wants the generals/brigadiers/ colonels/majors and captains taking charge of governance. They are not fit to rule. They are fit to fight. "Enroll your son in the fauj if his grades don't make the mark or colleges reject them," was the mantra in Pakistani households not long ago. But that's not to say that every duffer or a loser was marched off to the barracks. Not at all. Some brilliant brains and brave hearts defending our borders have won the highest awards in chivalry and art of war. They are our pride.
But martial law? No thanks. It's been a colossal failure whenever imposed. Imagine having an army captain turn up at your office in his jeep with his dunda tucked under his arm, wanting to take over your space because he's now your boss. I've seen it happen during the 1965 and 1971 wars and during Yahya's 1969; Zia's 1977 and Musharraf's 1999. Memories of the first martial law in Punjab in the 50s when squabbling politicians failed to control the public riots (déjà vu today) are etched in my mind (kids have a great retention power). The GOC of Lahore General Azam Khan was given orders by the Defence Secretary Gen Iskander Mirza to go sort everyone out. Sure he did! Instead of targeting the politicians responsible for the mess (and I can give you the inside story), the chief secretary and commissioner Lahore got jerked around. Like a hurricane, the little general in his uniform would show up at the door, unannounced, and begin barking orders throwing the whole household into a tizzy.
Fast forward to another martial law.
My chapter opens on a cold spring day when the blossoms in New York were just opening up and the sun felt good. We wound our way to the Pakistan mission located on a side-road of the swank Fifth Avenue, the home of Manhattan's millionaires. Fluttering in the mild breeze was a giant Pakistani flag on a slanted pole. It was making a statement. Pride and hope rushed to the brain as we climbed a majestic staircase, the kind you see in old mansions, to step into a crystal chandeliered room. The voting had begun. Did we want the general to stay in office for three years to clean up the mess after Nawaz Sharif? Of course yes!
Soon after Musharraf became the president, he went to China to talk shop. According to someone very close to him, the couple didn't have extra dollars to buy themselves thermal vests. They shivered until someone in the entourage lent them $300 to go get themselves woolies. That was the winter of 1999. "The suits he wore during the trip were atrocious, cheap material and badly stitched." Very soon Mr & Mrs Musharraf's wardrobes underwent a sea-change. Donning Armani suits and matching ties with imported leather shoes became the dictator's hallmark. When the Iraqi President Saddam Hussain offered oil to Pakistan at throwaway prices, Musharraf declined. Why? The Americans had gotten wind of it waving green backs at him that proved too tempting to resist. Some went into the Pakistani treasury; some allegedly into his bank account abroad.
The public may never find out how their president betrayed them and sold their national interest for a few pieces of silver. Of course we had a parliament in place; of course we had a prime minister with his troupe of ministers; of course we had an opposition - All the ingredients that make for a democracy. George W Bush patted Musharraf for introducing democracy; he invited him to his farm in Texas. He gave $ 10 billion to him to keep the 'war on terror' from reaching the American mainland. The brass back home cranked up its outdated hardware giving India the jitters. Visits to and fro from the US by our men in uniform became commonplace.
While Musharraf kept his generals happy with enough dough coming from the US, Shaukat Aziz and Chaudhry Shujaat Hussain were left to deal with democracy. They made a hash of the civilian set up; they demolished established institutions; they laid to waste all the progress achieved in the area of education, science and higher learning. Load-shedding entered our lives one fine morning. The chief justice and his judges were made non-functional.
Yeah, that was democracy!
Altaf Hussain has had enough of democracy. Cut in the style of a pseudo Alexander; Caesar; Genghis Khan, he rules over the hearts and minds of his burgeoning army listening in pin-drop silence to his histrionic declamation delivered on phone from London regularly at a raily (as in rally). This makes sure the rest of Pakistan (GHQ, Presidency and the PM House) hear him. Naught for nothing has the MQM always been a coalition partner with dictators and democrats alike over decades.
But Hussain's latest jingoism about empowering generals and pinning politicians to the guillotine has left tongues swaggering. The only positive outcome of this shemozzle is that the media and the intelligentsia have finally replaced their kid gloves with knuckledusters. But, instead of going to war with Hussain inviting martial law, we should try separating the chaff from the grain that he scatters so freely. There is sense in what he says. We need to engage him further; ask his action plan; how he intendeds executing it. He must have some plan. Can he leave his staple flowery script accompanied by a marsia style of lamentation, for once?
In the weeks to follow, I'd like to share my notes on democracy when it first became a fad way back in the 50s. The long journey may elicit some answers. And answers we must have. Because what we have today is not what we want.


Hekmatyar terms peace talks a drama

 PESHAWAR: Terming the peace talks a drama to deceive the people of Afghanistan, Hezb-e-Islami Chief Gulbadin Hekmatyar on Tuesday said that continuation of jihad was only way to resolve the prevailing problems in Afghanistan.
“We must be aware that Moscow, Washington and our jealous neighbours may impose the same situation on our nation that they imposed after the withdrawal of Russian forces from Afghanistan,” the fugitive Afghan leader said in a message sent to the Afghan Islamic Press (AIP) ahead of Eidul Fitr.
He said the Americans wanted to hand over the incomplete command of war in Afghanistan to Iran and Russia. “For this purpose they have strengthened pro-Moscow and Iran groups in Afghan army, police and intelligence department,” he said, and urged all the Muslims and mujahideen to join hands to foil the conspiracy.
He said talk about reconciliation was a drama to deceiving people. “Don’t see it the only way out of the Afghan issue and continue the jihad oust all the foreign troops from Afghanistan,” the HI chief said.
Hekmatyar alleged that explosions and rockets attacks on houses, villages, wedding celebrations and schools were carried out by the ‘enemy’.
Hekmatyar warned Pakistani and Iranian officials against supporting the United States and Afghan government. “We advise Pakistani and Iranian officials to shun support to Americans and not compromise on bloodbath of innocent Afghans and destroying their homeland in exchange for US perks and privileges,” he added.
The former premier also urged the Afghans to take active part in jihad and support mujahideen in their struggle against the foreign forces.