Gov’t blamed for high sugar prices
BACOLOD, Negros — Sugar stakeholders have blamed the lack of government support and regulation for the continued high prices of this commodity even as they face the threat of liberalization of sugar importation.
Confederation of Sugar Producers Associations, Inc. (CONFED) Spokespman Raymond Montinola said that if the price of sugar in the Philippines is higher than in other countries, it is because the industry lacks government support to improve the yield of sugarcane workers as well as their production area.
Montinola pointed out that unlike Thailand, one of the largest sugar producing countries in the world with 1.6 million hectares of land solely devoted to sugar, Filipino sugar planters don't get subsidies from the government to support their production.
"Our research and development is underfunded. We also lack subsidies," Montinola said.
"How can you have efficiency if you don't have support for the local industry?" he added.
Right now, the landed cost of refined sugar from Thailand is around 11,400 per 50-kilo bag, which is way lower than the average price of 11,450 per 50-kilo bag at farm-gate level here in the Philippines. At retail, it is more expensive at the average price of 11,700 per 50-kilo bag as of this month.
CONFED Board Member Salvador Escalante said farm-gate prices for sugar are currently on a downtrend, and the government still has to address the wide gap between farm-gate and retail prices of the sweetener.
"As far as farm-gate prices is concerned, it's already down. We are selling at 11,400 per 50-kilo bag. That means you should get it for 128 a kilo at retail," Escalante said. "But no, you get it for 160 a kilo in supermarket."
According to him, a price of 160 a kilo for sugar means the millsite price has to be around 13,000 per 50-kilo bag, which is not really the case. Thus, the government has to look at the traders and supermarkets and ask them why retail prices for sugar are too high.
Right now, there are 27 sugar mills, 12 sugar refineries, 13 biothenol distilleries and 12 biopower generating plants.
Sugar Regulatory Administration (SRA) Board Member Emilio Yulo said Filipino sugar producers are as efficient as sugar farmers in Thailand, but they get way more subsidies and they pour in billions of funds to their research and development. Thai government also provides free irrigation for their farmers.
Data from National Federation of Sugarcane Planters (NFSP) showed the sugar industry is the only industry in the Philippines that funds its own research through the Philippine Sugar Research Institute.
Senator Juan Miguel Zubiri said the other reason why Thailand can sell their sweetener at a very cheap price because it is only a by-product of sugarcane planting there. The Southeast Asian nation now largely uses the commodity for ethanol and power generation.
"No wonder Thailand can sell their sugar very low. It is only a by-product and they just dump it like excess," Zubiri said in a separate interview here.
Speaking to reporters here, Negros Occidental Vice Governor Eugenio Jose Lacson questioned the timing of proposed liberalization of sugar importation as the country is still working its way towards the liberalization of the rice sector under the Rice Tariffication Law.
Former Budget Secretary Benjamin Diokno first brought up the idea of deregulating sugar importation to bring down prices of sugar.
Agriculture Secretary Emmanuel Piñol did not even lift a finger to oppose Diokno’s proposal, which was backed by Socioeconomic Planning Secretary Ernesto Pernia. The sugar industry, comprised of millers, planters, sugarcane cutters, was left alone to defend themselves with some lawmaker allies.
"Why do it at the same time as rice tariffication?" Lacson said. "How about implement the Rice Tariffication Law first and see if it works?"
Solidarity of Workers in the Sugar Industry (SWSI) said with unrestricted entry of imported rice and sugar, prices will indeed go down under the law of supply and demand, but it will also greatly affect the welfare of local small farmers.
"The issue right now is the economic survival of small farmers," SWSI said in a statement. "The first to go was rice and now sugar will be the next."
Yulo said the government must focus first in "fine-tuning" the Rice Tariffication Law before it implements another one.
"What if the Rice Tariffication doesn't work? Then we will have a social problem. It will result in social unrest, especially in the province," Yulo said.
Lacson said that right now, his province is still "trying to get the attention of economic managers" for their appeal against unlimited sugar importation.
"We're trying to reach out," he said. "We talked to Piñol he admitted he can't convince the economic managers."
Negros island accounts for 55 percent of total areas planted to sugarcane in the country, followed by Mindanao with 21 percent share, Luzon with 14 percent share, Panay with 7 percent share, and Central Visayas with 3 percent.
Negros is among the sugar producing provinces that passed a resolution condemning the plan of the government to liberalize sugar importation in the country. Bukidnon made the same move.
SIDA provisions too sophisticated, strict
Yulo, who represents the sugar producers in the SRA Board, said there are items in the Implementing Rules and Regulations (IRR) of Sugar Industry Development Act (SIDA) that is making it hard for the industry to comply with the law.
Zubiri agreed with this, saying that he will initiate the review of SIDA law once Congress resumes sessions in June.
"Our problem is the socialized credit program," Yulo said. "The requirements at the bank are too sophisticated. They expect so much from farmers that this loan program is bound to fail."
Under SIDA, socialized credit shall be made available to farmers, through the Land Bank of the Philippines (LBP), for the acquisition of production inputs, farm machineries, and implements, necessary for the continuous production of sugarcane.
Yulo said there are also issues in the law's research development and extension program.
"Our problem is the recipients of these programs are too scared at COA [Commission on Audit]," Yulo said. "We are having a hard time receiving farm equipment because of stringent COA requirements".
Based on SIDA, SRA, in coordination with the Department of Science and Technology (DOST), should intensify researches on sugarcane high yielding or flood resistant varieties; pest control and prevention; latest farming, milling, refining and biomass co-generation technologies; among others.