BusinessMirror

Planters: SO 6 gives DA too much power on sugar imports

- By Jasper Emmanuel Y. Arcalas @jearcalas

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.

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