Sad saga of state sugar mills  

That the government is least disturbed by the sorry state of most public sector enterprises is evident from the latest allocation of taxpayers' money as lifeline to one of those. What is more frustrating is that many state-owned enterprises (SoEs) have been receiving doles, in addition to funds given to them against development projects, from the government for decades. The latest statistics on debt-servicing liabilities (DSLs) of the SoEs - more than Tk.1.0 trillion at the end of last financial year - show enormity of the problem. The Ministry of Finance (MoF) that toils hard to mobilise resources for financing the national budget, naturally, does not enjoy receiving frequent requests for sanction of special funds from other ministries to keep the SoEs under their control afloat. However, in most cases, a reluctant MoF, coming under pressure, makes such funds available to inefficient and sick SoEs out of the block allocation kept in the budget.

A case in point is the prayer for special allocation by the Bangladesh Sugar and Food Corporation (BSFIC) that is a perfect symbol of inefficient state-owned entities. The Corporation reportedly sought from the MoF a special allocation worth Tk.3.5 billion during the ongoing fiscal year (FY) to pay arrear salaries and wages to the workers and employees of the sugar mills under its control and keep the mills somehow operational throughout the next sugarcane crushing season. The MoF has already paid Tk. 700 million in two instalments and is now planning to make available another Tk.1.0 billion from the revised budget to the BSFIC.

If past experience is any guide, it is almost certain the Corporation would make requests for similar or even bigger allocations in future years. And after some dilly-dallying, the MoF would also meet such demands, at least, partially. But is there any reason for wasting taxpayers' money on the sick and perennially loss-making state-owned sugar mills every year? Of the 15 sugar mills under the control of the BSFIC, three were established in the 1930s, three in 1950s, seven in 1960s and two after the country's independence. So, most of these mills are now hardly anything but junk.

The cost of sugar produced by the state-owned mills is much higher than that of imported sugar. So, the BSFIC incurred substantial losses between FY 2007 and FY 2013 due to marketing of sugar at lower prices. Surprisingly, the Corporation had even incurred losses between 2010 and 2012 because of, what it terms, 'trade gap' (mismatch between import cost and selling price of sugar). Private refiners, however, have been making good amounts of profits out of imported sugar.

 The situation, undeniably, calls for shutting of the outmoded and inefficient state-owned sugar mills and modernising the ones that are relatively new. The reality is that these sugar mills, except for devouring taxpayers' money, do not have any meaningful role to play in the market. With only 15 per cent share in the domestic sugar market, they are hardly in a position to intervene in the market, as and when required on rational grounds to tame the price. It is time for the government to say 'enough is enough' and do what is needed in the greater interest of the national economy. The economy cannot afford the luxury of feeding the inefficient and loss-making state entities with taxpayers' money for an indefinite period.