Sugar cane cultivation and sugar manufacture represent the ‘worst of both worlds’. The price of sugar cane is administratively fixed by the government and the finished product ie sugar is supposedly sold at the ‘market rate’ to wholesale dealers and ultimately to consumers (both households and industries). It is akin to the government ordering a tailor to buy fabric at the price set by the government and sell his finished garment at the market rate! This cannot work and creates significant distortions in the value chain. The list of government ‘distortions’ in the sugar sector is long and starts with the issuance of or application for the licence of a sugar mill. It is the government that decides where a sugar mill can or cannot be installed. The government also decides when sugar mills can start the crushing season (in other words when the tailor master will open his shop) and when mills have to make payments to their raw material suppliers for a business which is supposed to be free and liberal in nature in which private parties are supposed to make deals on their own without government intervention. It would not be out of place to ask what justifies government meddling in the sugar sector when invariably every household spends more on rice than sugar. Sugar cane is a long-gestation crop and takes from 14 to 18 months and is known as a water guzzler requiring a huge quantity of precious irrigation water for maturing. This 14- to 18-month crop period makes sugar cane unsuitable for small growers and only medium- and large-scale farmers cultivate this crop. The dual aberration, that is the lower consumption importance and lower equitability value for the sugar cane crop on the production side (and a large environmental impact in terms of water requirement), makes government intervention even more bizarre. Why does the government intervene and take upon itself the wrath of all stakeholders as it is impossible to satisfy conflicting expectations of the players in the value chain? To understand the sugar sector mess, it is important to bring into the picture the current sugar mill owners who are also large-scale sugar cane farmers. This is different from the 1960s or the early 1970s when mill owners were mostly industrialists who had little interest in farming and the mill owners hardly had any electoral clout. This sugar mill ownership landscape changed in the 1980s and large-scale farmers, as a form of state patronage (and with public-sector bank financing) got sugar mill licences and entered the business. The rise of these large-scale farmers as mill owners consolidated vested interests. The worst form of this vested interest manifested itself last year when millers were provided large-scale export subsidy and the same year the commodity was imported at almost twice the price of its export. Taxpayers and consumers were doubly robbed with this simultaneous export and import of sugar. A tiny portion of the crop is also processed on the farms and gur is produced which is consumed mostly in Khyber Pakhtunkhwa and exported to Afghanistan.