‘Thieves Fighting Thieves’
Sugar industry faces blight; planters warn of revolutionary upsurge

Although the monocrop sugar-based economy of Negros – an island in central Philippines – appears not headed for collapse the industry is suffering from slump given its inability to compete with sugar imports now flooding the domestic market. And sugar planters are blaming technical smuggling – and Malacañang.

By Karl G. Ombion
Bulatlat.com  

Sugar mill in La Carlota City, Negros Occidental   Photo by Karl G. Ombion

BACOLOD CITY - Negros has long been economically stagnant because of the three-year sugar crisis. But the way sugar planters and traders are trading barbs today the whole island could yet bring itself near the proverbial “social volcano.”

Although the monocrop sugar-based economy of Negros – an island in central Philippines – appears not headed for collapse the industry is suffering from slump given its inability to compete with sugar imports now flooding the domestic market. And sugar planters are blaming technical smuggling – and Malacañang.

Leaders of militant farmers groups in Negros and the underground armed movement offer a different view. To them the current sugar crisis is the result of squabbles among sugar planters, millers and traders and Malacañang should also be held to account.

Since the start of the milling season, the mill gate price of raw sugar has steadily dropped from P845-P870 a bag to its current P634.

Alarmed by the continued lowering of sugar prices, sugar planters from the United Sugar Producers’ Federation of the Philippines (Unifed) held a protest march two weeks ago from the Capitol Lagoon to the public plaza in this city. Led by Manuel Lamata and backed by a contingent of farm workers, the protesters asked Malacañang – the presidential office – to stop the smuggling of sugar that they said is causing a glut and is bringing down sugar prices for months now.

Lamata said that sugar is being smuggled in from Thailand and Australia in container vans. He revealed that at least 150,000 bags of sugar have been brought into the country illegally and are unloaded mostly in Cebu and Manila.

Known to government

The outspoken sugar planter told Bulatlat.com that smuggling through the country’s ports is going on under the nose of government authorities. Smugglers buy cheap sugar from abroad, and make a net profit of P50-100 for every 1 kg of sugar brought in. They give away P50 per 1 kg as bribe, he also said.

The amount of smuggled sugar does not include huge loads of pre-mix sugar concentrates or flavored juices that are brought into the country by traders who are close, he said, to Malacañang. Now the favorite of big industrial and commercial users because of its cheap price, premix sugar is only slapped with 3 percent tariff compared to 65 percent for imported raw sugar.

The sugar planters also point to technical smuggling of pre-mix sugar as among the causes of the glut or oversupply that drives the prices of sugar down. Pre-mix sugar is being unloaded from container vans, causing an oversupply and in the process, pressing sugar prices down. This is causing financial blight to planters and millers, Lamata warned.

Given the big volume of smuggled sugar, sugar produced in the various sugar mills in the province is hardly moving, a source from the Sugar Regulatory Administration (SRA) told Bulatlat.com. Warehouses of sugar mills are always filled up while other millers are renting out bodegas where sugar that is not brought to market is stocked, the source added.

Pressed to explain reports of smuggling, SRA Administrator James Ledesma said that while government continues to ship out sugar to the United States and other foreign markets, the volume of sugar coming in is just too big to stop the prices of sugar from plummeting.

Admits smuggling

Ledesma also confirmed fears that the sugar price could slide to P500 a bag. “The worst could yet happen,” he warned. He admitted that sugar smuggling exists.

In recent media interviews, however, Negros Occidental Governor Joseph Marañon called for the resignation of Ledesma. If Ledesma cannot solve the sugar crisis, the governor said, he should leave his post.

Marañon also warned that if key industry players and Malacañang failed to stop sugar prices from sliding, thousands of sugar farm workers would join the revolution, reminiscent of the 1970s when the sugar crisis fueled the armed revolutionary struggle waged by the New People’s Army (NPA).

Earlier, in a strongly-worded statement published in local dailies, Arsenio Acuña, Negros del Norte Sugar Planters’ Association president, said bigwigs in the sugar industry including millers, heads of planters’ groups and traders were involved in the smuggling scam. Those found guilty of sugar smuggling should be lynched, he said.

Former Sugar Regulatory Administrator Wilson Gamboa also warned of the blight and blamed the powers-that-be for the crisis. He also shot down a proposal by former Negros Occidental Gov. Daniel Lacson, Jr. for a sugar-buying scheme saying government has no money due to deficit-spending.

Gamboa called for the resignation of President Gloria Macapagal-Arroyo whom he said is responsible for nurturing the climate favorable for sugar smuggling. 

Police Senior Supt. Carlos Holganza, chief of the Anti-Smuggling Task Force, himself confirmed that sugar smuggling has grown so rampant it has become unstoppable and is causing a glut in the market. But he dismissed insinuations that Macapagal-Arroyo’s husband, Mike Arroyo, and his brother Ignacio Arroyo are also to blame for the sugar smuggling.

Battle of thieves

Meanwhile, the sugar industry crisis has been likened to a case of “thieves robbing thieves.” In clarifying this point, John Milton Lozande, secretary general of the National Federation of Sugar Workers (NFSW) told Bulatlat.com that this is not the first time the sugar planters, millers and the traders favored by Malacañang, and those not, are locked in a fierce fight over prices of sugar and sugar policies.

“The so-called crisis is caused by squabbles, deceptions and maneuvers between big millers-traders and planters,” Lozande said. “The planters are accusing the millers-traders of manipulating the sugar prices and engineering the smuggling of imported sugar and pre-mix sugar concentrates that cause over supply and consequent drop in the mill-gate prices of sugar. A group of traders identified with the Malacañang bureaucrats are monopolizing the sugar importation and market pricing causing marginalization of smaller traders.”

Bulatlat.com research reveals that during the dictatorship in the 1970s-1980s, President Ferdinand Marcos and his cronies led by former Ambassador Roberto Benedicto virtually lorded over the sugar industry and raked in billions of profits from production, financing, marketing and trading – all under the auspices of Malacañang-controlled National Sugar Trading Administration (Nasutra) and the Philippine Sugar Commission (Philsucom).

Under the Estrada presidency, a group of traders and exporter-importers cornered the marketing-trading, export-import, and pricing of sugar in the whole country. There were reports of Malacañang control and manipulation of sugar market and trading, as well as massive sugar smuggling by traders identified with alleged Estrada cronies.

Controversial was a special executive order of President Estrada authorizing his office to control all imported sugar, including the reclassification of all imported sugar that in turn chalked in billions in new taxes.

Liberalization and deregulation

Lozande said all these were made possible under the government’s policies of liberalization and deregulation. He also said that when Macapagal-Arroyo became president she placed key players in the industry under her influence and mobilized her favored traders to control the sugar trading and marketing. She then revamped the SRA and picked as its head a pro-government planter, Ledesma.

Local media and planters also alleged that Malacañang mobilized big traders/exporter-importers led by Lucio Co of Pure Golds Industries, which reportedly became the sole importer of all duty-free shops in Subic and Manila and as sole importer of Thailand sugar, among others. Co is the person whom Unifed leader Lamata had told local media was caught in Cebu for allegedly carrying five vans containing thousands of tons of smuggled sugar.

The President, Lozande also said, has allowed the massive importation of sugar especially from Thailand, Mexico and Australia resulting in the flooding of the local market with cheap sugar. Technical smuggling became rampant involving the illegal entry of cheaper imported sugar ($11-15 cents per pound) from world market, and the reclassification of this to sugar A for export to the lucrative U.S. market ($21-24 cents per pound, o P980 per bag).

“Naging malaganap ang maniobrahan at lansihan sa loob ng industriya ng asukal” (Maneuvers and deceptions became the order of the day),” Lozande said.

Similarly, Fr. Frank Fernandez, Negros revolutionary leader, laid the blame for the present sugar crisis on the doorstep of Malacañang and a faction of the sugar planters-traders under its wing composed of Mike Arroyo and presidential brother-in-law Ignacio Arroyo.

“Big sugar traders, millers and several officials of the Sugar Regulatory Administration (SRA), sugar planters association and Malacañang bureaucrats are part of the group,” said Fernandez, believed to be the head of the National Democratic Front of the Philippines (NDFP) in Negros.

Not local planters but the “sugar industry mafia” is raking in millions of money from sugar transactions, from government funds for the rehabilitation of the sugar industry and sugar smuggling operations taking place within a crisis-ridden sugar industry hit hard by the government’s adherence to the policy of liberalization, deregulation and privatization, Fernandez also said.

Fernandez said that the NDFP is willing to build links of “friendship and alliance with individuals, groups and forces in the sugar industry” to wage a common struggle against the pro-imperialist and anti-people policies of President Macapagal-Arroyo. Bulatlat.com

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