By Muhammad Mudassar ISLAMABAD, Jan. 31 (INP-WealthPK): Pakistan’s sugarcane industry has a great potential for electricity generation that is around 3,000MW. By utilizing the resources, electricity can be supplied to the national grid in the winter season when the generation of electricity from hydel is lower. Sugarcane is cultivated on 26.5 million hectares of land globally which produces about 1,861 million tons of sugar. According to the Ministry of Planning and Development, Pakistan’s production of sugarcane was 81 million tons in the fiscal year 2020-21, 22 percent more than the previous fiscal year (which was 66.3 million tons). The reason for the increase in production is that the area under production has also increased from 1 million hectares to 1.2 million hectares in FY 2021. This illustrates that the farmers are switching to sugarcane cultivation. Pakistan is getting 58 tons per hectare yield of sugarcane, but it has the potential of getting 75 to 80 tons per hectare. A total of 90 sugar mills are currently operational in Pakistan. The waste of sugarcane can also be used to produce electricity. According to IntechOpen, a UK-based publisher where academia and industry create content with global impact, 2.5 tons of bagasse generates five tons of steam that generates 1MWh electricity. Pakistan’s total installed capacity of electricity was 37,261MW during the fiscal year 2021 that was 3,5972MW in the fiscal year 2020. The largest contributor to Pakistan's electricity is hydel (26 percent) followed by LNG (25 percent), furnace oil (15 percent), natural gas (12 percent), coal (9 percent), nuclear (9 percent), and renewable (5 percent). Pakistan's energy sector is already struggling due to the high cost of electricity generation. The below graph shows that the production of electricity is increasing. Source: Pakistan Economic Survey FY 21 Usually, farmers run their homes by selling agricultural products (dairy and crops). The sugar mill owners usually pay farmers at the end of the crushing season. Most of the time, the issue of payment arises among farmers and mill owners. Two major reasons for payment issues are support price and subsidy to mill owners. Late payment discourages the farmers that lead to the reduction of the production. Currently, sugar industries are working according to the Pakistan Sugar Act 1950 which is outdated and unfit for the current infrastructure and situation of the sugar industry. The sugar mill owner faces the issue of labor because the industry is seasonal. Crushing starts in November and ends in February. Farmers and sugar mill owners often complain that the government does not take them into confidence before announcing the subsidy and support price. Recently, according to Pakistan Sugar Mills Association, the price of sugar, including a 17 percent sales tax, is Rs95 per kg, but the government announced the support price of Rs80 per kg, which resulted in Rs2.5 billion losses to the sugar industry. So, the sugar mill owners did not pay farmers in time and farmers went on strike in different parts of the country. The middle man is an important component that causes the higher price of sugar. The government should ensure the availability of sugarcane at the support price and eliminate the middle man. There is an option of co-generation of electricity, also mentioned in National Policy for Power Cogeneration by Sugar Industries 2008, during the crushing time (November to February) through bagasse, and during March to October, coal can be used to generate electricity. The government should subsidise the installation of power cogeneration plants and tax incentives must be provided to sugar mill owners on electricity generation from bagasse. To improve the per hectare yield, the government should give awareness to farmers about the sugarcane growing techniques. The government must also take action against the sugar cartels. To make the sugar market more competitive, the government should facilitate new investors in this sector that will help eliminate the chances of the sugar cartels.