Sugar Mills Controversy Fuels Public Accounts Committee Concerns in Pakistan

Sugar Industry Under Fire: PAC Demands Transparency as Profiteering Allegations Mount

Islamabad: The Public Accounts Committee (PAC) has launched a scathing inquiry into Pakistan’s sugar industry, demanding complete transparency regarding mill ownership and profit beneficiaries. The committee expressed deep dissatisfaction with the industry’s regulatory framework and the alleged rampant profiteering, labeling the situation “daylight robbery.”

During a heated session, members of the PAC grilled officials from the Federal Board of Revenue (FBR) and the Sugar Advisory Board (SAB), accusing them of failing to curb massive price gouging and poor governance. MNA Khawaja Sheraz Mehmood declared that “Rs287 billion have gone into a few pockets,” highlighting the vast sums allegedly being siphoned off by a select few.

Riaz Fatyana,another MNA,directly accused the president and prime minister of protecting the alleged profiteers,intensifying the already tense atmosphere. The PAC firmly rejected the explanation that ownership details were sensitive, insisting on the disclosure of all owners and threatening to cease further briefings without it.

The debate turned especially fiery when Malik Amir Dogar named prominent political figures, including President Asif Ali Zardari, Jahangir Tareen, and members of the ruling Sharif family, as major stakeholders in sugar mills. This led to sharp exchanges with lawmakers Shazia Marri, Afnanullah Khan, and Bilal Mandokhail.

PAC Chairman Junaid Akbar Khan pointed out the alarming concentration of ownership, noting that only 42 families appeared to be profiting from the industry. He questioned the lack of competition and the barriers to entry for new players. The disparity in sugar prices was also highlighted, with Khawaja Sheraz Mehmood citing that sugar in India was available at the equivalent of Rs143/kg, substantially cheaper than local rates.

In response to the PAC’s concerns about soaring domestic prices, the food secretary explained that tax reductions were implemented to improve affordability. However,he acknowledged that an import duty of Rs80 per kg would inherently make imported sugar more expensive.A point of contention arose regarding the government’s decision to import sugar despite claims of ample domestic stock. The PAC chairman questioned the rationale behind this move, asking, “If there was enough stock, why was the decision made to import it?” Officials stated that 1.9 million tonnes of sugar were available,sufficient until november,but PAC members stressed the importance of careful planning to prevent spoilage and prepare for the upcoming crushing season.The government’s approval of a 300,000-ton import to stabilize supply was also discussed, with assurances that it would not negatively impact farmers or revert to previous export markets.

The PAC concluded by reaffirming its commitment to pursuing full transparency in the sugar industry, vowing that the issue would not be dropped until the beneficiaries of the profits were fully identified.

in a separate matter, the PAC also initiated a probe into a Rs1.95 billion supplementary grant allocated to the Press Information Department for a flood awareness campaign. Audit officials reported that a mere Rs150 million was utilized for the campaign, with the remainder allegedly diverted. This discrepancy has been referred to a subcommittee for a thorough investigation.

Published in archyde.com, July 30th, 2025

What specific measures can the Sugar Regulatory authority (SRA) take to improve openness in subsidy distribution and prevent fraudulent claims?

Sugar Mills Controversy Fuels Public accounts commitee Concerns in Pakistan

Allegations of Financial Irregularities & Subsidy Mismanagement

The Public Accounts Committee (PAC) of Pakistan’s National Assembly is currently investigating widespread allegations of financial irregularities and mismanagement of subsidies within the country’s sugar industry. This sugar scandal, a recurring issue in Pakistani politics, has once again brought the powerful sugar mafia under intense scrutiny. The core of the controversy revolves around claims of undue benefits received by sugar mill owners, often at the expense of both sugarcane farmers and the national exchequer. Key concerns include inflated claims for sugar subsidies, manipulation of sugar prices, and potential instances of tax evasion.

The PAC’s Investigation: Key Findings So Far

The PAC,led by Noor Alam Khan,has been conducting hearings that have revealed a complex web of alleged wrongdoing. Some of the key findings emerging from the investigation include:

Unjustified subsidies: Evidence suggests that sugar mills received substantial subsidies without meeting the stipulated criteria. This includes claims for transportation costs that appear inflated and discrepancies in reported production figures.

benami Transactions: The committee is investigating allegations of benami (anonymous) transactions used to conceal ownership and evade taxes. This practice allows individuals to illegally control assets without revealing their identity.

Loan write-offs: concerns have been raised regarding the alleged illegal write-offs of substantial loans extended to sugar mills by state-owned banks.

Impact on Sugarcane Farmers: Farmers consistently complain about delayed payments and being offered prices below the officially mandated minimum support price for sugarcane. The PAC is examining whether the financial irregularities within the mills contribute to this exploitation.

Cartelization: The PAC suspects the existence of a powerful sugar cartel that manipulates supply and demand to artificially inflate prices,benefiting mill owners while harming consumers.

The Role of Government Subsidies in the Crisis

Sugar industry subsidies in Pakistan are intended to support domestic production and ensure affordability for consumers. However, critics argue that thes subsidies are often misused and disproportionately benefit a small number of powerful individuals.The current crisis highlights the need for greater transparency and accountability in the allocation and monitoring of these funds.

Types of Subsidies Under Scrutiny

Transportation Subsidies: Designed to offset the cost of transporting sugarcane from farms to mills, these subsidies are alleged to have been fraudulently claimed.

Export Subsidies: Provided to encourage sugar exports, these subsidies are being investigated for potential misuse and manipulation.

Input Subsidies: Subsidies on fertilizers and other inputs used in sugarcane cultivation are also under review to ensure they reach the intended beneficiaries – the farmers.

Impact on the Pakistani Economy & Consumers

the sugar crisis has far-reaching consequences for the pakistani economy and its citizens.

inflation: Artificial price increases driven by alleged cartelization contribute to overall inflation, impacting the purchasing power of ordinary consumers.

Agricultural distress: Exploitation of sugarcane farmers discourages investment in the agricultural sector and contributes to rural poverty.

Revenue Loss: Tax evasion and fraudulent subsidy claims result in significant revenue losses for the government,hindering its ability to fund essential public services.

Political Instability: The recurring nature of the sugar scandal fuels public distrust in the government and contributes to political instability.

Historical Context: Recurring Sugar Scandals in Pakistan

this isn’t the first time the Pakistani sugar industry has been embroiled in controversy. Similar allegations of financial irregularities and political interference have surfaced repeatedly over the past several decades.

2019 Sugar Crisis: A major investigation in 2019 revealed widespread irregularities in sugar production and pricing, leading to a significant increase in sugar prices and shortages.

Past PAC Inquiries: Previous PAC inquiries have also highlighted issues of subsidy mismanagement and tax evasion, but concrete action has often been lacking.

Political Connections: The sugar industry is often perceived as being closely linked to powerful political figures, making it arduous to hold those responsible accountable.

Potential Solutions & Reforms

Addressing the systemic issues within the Pakistani sugar industry requires a multi-pronged approach.

Strengthening Regulatory Oversight: The Sugar Regulatory Authority (SRA) needs to be empowered and given the resources to effectively monitor the industry and enforce regulations.

Increased Transparency: Making information about subsidies, production costs, and ownership structures publicly available can help deter fraudulent activities.

Direct support to Farmers: Providing direct financial assistance to sugarcane farmers, bypassing the mills, can ensure they receive fair prices for their produce.

Anti-trust Legislation: Enacting and enforcing robust anti-trust legislation can break up cartels and promote competition.

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