Smuggling Blamed for Negros Sugar Crisis
Crisis is inevitable under trade liberalization, solon says

Negros’ sugar economy faces another crisis owing to the continued drop in the prices of sugar and sugar smuggling is being blamed. But a progressive legislator says the crisis is nothing new and is bound to happen under government’s trade liberalization policy.

By Karl G. Ombion
Bulatlat.com

BACOLOD CITY – Negros’ landlords are blaming sugar smuggling by some traders for the continued drop in the prices of sugar and are asking the Macapagal-Arroyo administration to stop it.

But a progressive legislator is singling out another culprit: government’s trade liberalization policy.

Prices of sugar have dwindled from P840 (about $15.27) per 50 lkg (pound per kilogram)-bag at the start of the milling season last September to a low P707 ($12.85) by the yearend. During the past three years, prices of sugar were rising and were pegged at P950 ($17.27) per 50-lkg bag before September last year.

Irate sugar producers last week warned that the Negros economy faces its worst crisis ever if the situation is not arrested soon.

Big names and major planters groups in the sugar industry led by the National Federation of Sugar Producers, were quick to put the blame on rampant sugar smuggling by some sugar traders. They also called on the government to subsidize the buying of sugar to improve sugar prices.

Sugar smuggling

Joseph Maranon, Negros Occidental governor and sugar planter himself, echoed the position of the sugar producers by saying that sugar smuggling is the cause of the rapid and steady drop in sugar prices. He also belied insinuations that their call for sugar subsidy was politically motivated, or to make it appear that President Gloria Macapagal-Arroyo is doing nothing to keep the sugar industry afloat.

However, James Ledesma, chief of the Sugar Regulatory Administration (SRA) and Rene Revilla, presidential adviser for Western Visayas, brushed aside the allegations as rumors saying there have been no reports of arrested sugar smugglers.

Ledesma said that what the sugar industry experiencing is low farm gate prices due to oversupply of sugar in the local market. “That is different from sugar industry collapse,” he said. “We still have the mechanisms to address it, like the shipment of 135,000 MT in December as part of our U.S. sugar quota, and the increase of our export of sugar D for world market.”

“The crisis we are experiencing today is in fact not only limited to the sugar industry but is felt by almost all other sectors, especially agricultural sector,” he also said.

Government’s decision to import sugar has nothing to do with the president’s election plans, Ledesma added.

Old problem

On the other hand, party-list Bayan Muna Rep. Siegfred Deduro accused the sugar barons of just making a crybaby out of a problem they alone were to blame but do not wish to solve and change.

Deduro said the sugar crisis is not new since its structural roots remain unaddressed. “The sugar crisis is bound to worsen because the government has further liberalized the country’s already import-dependent and export-oriented economy which allows the flooding into the local market of cheap agricultural and industrial goods, including sugar from abroad,” he said.

“We have practically lost control over the workings of the international market forces which also extend their control and manipulative schemes in our domestic economy, investments and trading,” the party-list congressman said. “Therefore, we simply cannot compete, and our local agricultural producers are always losing and at the mercy of the foreign monopoly capitalists and their local cohorts,” he said.

Deduro also said that sugar smuggling, the shifting of sugar categories to favor imports and exports, or even of sugar hoarding, are inevitable in a liberalized economy.

“If there is to blame on the fluctuating prices of sugar, it is no one else but the Macapagal-Arroyo on top, and the big planter-miller-traders below, who keep a blind eye on the necessity to break up land monopoly and mono-crop economy, especially in Negros,” he said. Bulatlat.com

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