Planters: SO 6 gives DA too much power on sugar imports
A GROUP of sugarcane planters on Thursday lamented that Sugar Order (SO) 6 provides the Department of Agriculture (DA) with “excessive” discretionary power in allocating the 440,000 metric tons (MT) of imported refined sugar.
The Confederation of Sugar Producers Association (Confed) emphasized that Section 5 of SO 6 gives the DA the “final discretionary authority to approve import applications,” which it claimed is overstepping the powers of the Sugar Regulatory Administration (SRA).
“This is the first time such a condition is provided. This could constitute excessive discretionary power granted to the Department of Agriculture and a possible circumvention of the Sugar Industry Development Act (SIDA),” Confed said in a statement sent to reporters on Thursday.
The group pointed out that SO 6 does not contain any provision that would “ensure transparency in the granting of import permits.”
The Businessmirror reported on Thursday that President Ferdinand R. Marcos Jr., who is concurrently serving as the DA secretary, will have the final say on the sugar allocation of every eligible importer under the latest importation program of the national government. (Related story: https://businessmirror.com.ph/2023/02/16/sugarimport-allocation-requires-da-chiefnod/)
Under SO 6, the import allocation per importer will be based on the recommendation by the SRA board and will be approved by DA.
In the previous sugar import programs of the national government, the SR A board set a limit on the allowable import volume per importer or the allocation was prorated for each eligible importer.
“There is no formula that establishes the volume that any particular applicant may apply for. In contrast, Section 5 of Sugar Order No. 2 series of 2022-2023 has a specific provision for volume per eligible importer (pro-rated based on excise tax payments),” Confed said.
“Again, this allows for too much discretionary power in the hands of the DA (not SRA, which is left with only recommendatory authority under Sec. 5 of Sugar Order No. 6, Series of 2022-2023),” Confed added.
Furthermore, Confed flagged another provision in SO 6 that empowers the agriculture department to waive or reduce the performance bonds of eligible importers, claiming that it would be a gateway for “possible abuse of discretion.”
“The waiver or reduction of Performance Bond by the Department of Agriculture takes away the authority from the agency (SR A) imposing such a requirement, which again is open to possible abuse of discretion,” it said.
Under Section 13 of SO 6, every allocation of imported sugar will be subjected to a bond of P850 per 50-kilogram bag unless otherwise waived or reduced by the DA in case of emergency, or when there is a need to address high consumer retail prices or upon justified circumstances.
“Any waiver or reduction in the amount of the performance bond shall be effective only upon the issuance by the Department of Agriculture of an appropriate order or memorandum,” Section 13 read.
Confed also warned that another provision of SO 6 could hinder sugar producers’ cooperatives from participating under the latest sugar import program because of a problem with the definition of “consumers.”
Citing the import rules, Confed explained that eligible importers must be actually engaged in the selling of physical sugar to domestic “consumers.”
However, the group argued that the definition of consumers under SO 6 excludes “actual final consumers” as it only listed manufacturers, industrials, retailers, repackers, wholesalers and traders as “consumers.”
“If a producers’ coop, which is an SR Aaccredited trader, only sells physical sugar to final consumers, and not to the other ‘consumers,’ it may not qualify for import allocation. This limits the number of producers cooperatives that may qualify,” it said.
The planters group reiterated its call for a “transparent, fair and equitable” importation program that is open to all accredited international sugar traders and sugar producers on a prorata basis. The group disclosed that its member associations and cooperatives have “expressed” interest to participate under the latest sugar import program “subject to compliance with all legal requirements.”
“We ask SRA to consider this as our desire to provide its members equal opportunity to participate in programs that will affect them directly,” it said.
Confed produced the most volume of raw sugar in the previous crop year among all planters confederations in the country at 407,611.58 MT. The group accounted for 32.3 percent of the 1.262 million MT raw sugar produced by all planters confederations nationwide.