BITTER SWEET: Sugar mill in
Negros Occidental (left photo). At right photo, a Negros caneworker toils
in the field.
Photo by CIRMS
BACOLOD CITY –
“Unless the government gives full protection and support to the sugar
industry, the industry will be gone after 2010, when all the tariffs on
imports of agricultural produce, including sugar are removed.”
This was the
sentiment expressed by Jose Nadie Arceo, president of the United Farmers
Association of Negros-South Inc. (UNIFARMS), an association of small sugar
landowners affiliated with the United Sugar Planters Federation (UNIFED),
based in southern Negros. The members of UNIFARMS are sugar planters with
25 hectares or less of cultivated lands.
Arceo believes that
to save the sugar industry, the country must revert back to a regulated
regime. “Our average sugar production every year is at 2.0 to 2.1M metric
tons almost equal to our domestic consumption. With an annual increase of
just 3 percent to 5 percent in domestic consumption, we could easily cope
with the demands,” he said.
The problem with the
current liberalization and deregulation policy of the government, Arceo
also said, is that the local industry is losing out to the massive imports
of sugar from countries with highly efficient, technology-wise, and
heavily-subsidized sugar industries.
Lack of support
Arceo compared the
failure of government to support the sugar industry with the problems
confronted by the government’s agrarian reform program.
“The Comprehensive
Agrarian Reform Program (CARP),” he said, “is a good program, that is why
many of us small farmers have offered some of our lands for CARP coverage.
But it failed because the government did not provide poor farmers with
access to capital and subsidies to make their lands productive”.
“The government does
not also have a comprehensive program to support the sugar industry. We
have several government agencies that are supposed to assist sugar
producers, like the Land Bank of the Philippines, the Quedancor, among
others, but we do not know what they are doing,” Arceo added.
The sugar planter
said “For example, if the government had only set up a system of
centralized procurement and sale of fertilizers, the sugar producers would
have saved and earned a lot. But the case now is that, sometimes the price
of a bag of fertilizer is even higher than a 50 kg bag of sugar.
Government agencies are still buying fertilizers from local private
traders which normally charge higher prices.”
Arceo added that the
problem is further compounded by the smuggling of sugar by some big people
in the industry and in government.
Rampant smuggling
Arceo also said that
the Sugar Regulatory Administration (SRA) is not doing anything about the
smuggling of sugar.
“The SRA should focus
its efforts and resources on curbing rampant sugar smuggling, which remain
the most debilitating problem facing the entire Philippine sugar industry,
especially the small sugar landowners,” Arceo added.
Arceo believes that
the culprits of sugar smuggling are big and moneyed syndicates with links
to big names in the sugar industry and higher ups in the government. He
said that the operations of the smugglers are obviously well-organized,
well-planned, well-coordinated and well-financed.
He mentioned the case
of Kraft Food Philippines that was able to import premix products at three
percent tariff. This, according to him, was a clear violation of
Presidential Executive Order 295 pegging the tariff on all imported
premixes containing more than 65 percent sugar at 48 percent.
He said that they
have joined several other sugar federations in filing a case against Kraft
Food Philippines. They filed the case to show that they are serious in
penalizing errant players in the industry. This is a case for testing the
“political will of our sugar industry leaders”.
Arceo revealed that
he once wrote SRA stressing that the final solution to sugar smuggling is
an all out, well-planned and well-financed campaign against sugar
smugglers. He later got a rebuff stating that “there is no final solution
to the problem.”
Still, Arceo believes
that sugar smuggling can be stopped, if the SRA and the government get
their acts together and gather the support of the whole industry, not just
the voice of the Philippine Sugar Alliance, which according to him is
dominated by big sugar landowners, millers and traders.
He is however wary of
the ambivalent responses he is getting from industry leaders and even the
SRA. He quoted SRA chief James Ledesma as saying, “I don’t want to get
killed.”
Dearth of industry
leaders
Asked why sugar
smuggling continues unabated despite several pronouncements by SRA and top
government officials that it is under control or manageable, Arceo said,
“Well, we need industry leaders who are honest, not selfish and with a
strong political will.”
Arceo also laments
that most often small sugar landowners associations are not consulted on
matters that concern the industry. He specifically scored SRA saying that
“The SRA consults only the leaders of big federations, and seldom, or not
at all, the small sugar planters associations.”
In addition, he said,
SRA is inutile in controlling sugar smugglers, and regulating the ups and
downs of the sugar industry to benefit not only the big sugar landowners
and big traders, but also the small sugar landowners.
He also said that
“Industry leaders seem only concerned with their own interests and
survival, unmindful of small sugar landowners who need more support than
them. They should not forget that this industry has developed not only
because of their efforts but also that of the more numerous small sugar
landowners, the sugar workers and farmers.”
“We really need
leaders who care for the welfare of the entire industry and the people not
just their own interests. These leaders should unite the different member
organizations, also listen to associations of small sugar landowners like
us, and demonstrate the capability and political will to resolve key
issues in the industry,” Arceo averred.
To attain this, Arceo
suggests that the government should convene an assembly of more than 150
sugar associations nationwide, from small to big ones, to ensure a truly
broad and democratic consultation among all the stakeholders in the
industry.
This, according to
Arceo, will guarantee that the sugar industry will become “truly dynamic,
equitable and beneficial to all players and their dependents.”
Additional levies
Another issue
confronting small sugar landowners is the move of the SRA to continue
imposing a levy of PhP 2 (three cents) per kilogram of sugar produced.
Sugar Order no.2
Series of 1995-1996 provided for a lien of Php 2.00/l kg bag on all sugar
produce in favor of PHILSURIN. It is due to expire 31 August 2005. The
SRA’s Sugar Order No.8, Series of 2004-2005, issued
August 18, 2005
provides for the continuity of Sugar Order No.2.
UNIFARMS says that
the additional levy is “illegal and confiscatory”.
Arceo said, “We are
not against the Php 2 lien per se, we have done that before with the
Social Development Fund, among others. But this time, we were not only
uninformed, we were even given vague reasons”.
Arceo said that they
have always been supportive of the moves of SRA especially when they know
that these were for the good of the sugar landowners, the sugar industry
and the people.
“The problem is,”
Arceo claimed, “there has been no consultation and no clarity where the
money should go except for the vague ‘monitoring service fee’ and
supposedly to fund the Philippine Sugar Research Institute Foundation Inc.
(PHILSURIN), which is a private sugar research agency”.
Arceo said, if that
is the only purpose, the funds to be generated for the fiscal year will be
more than enough to finance the entire inventory. He also asserted that
sugar planters do not need additional researches as there are enough
studies regarding high yielding sugar varieties and higher productivity
schemes. He also questioned the need to fund a private agency when there
are enough government agencies to conduct researches.
Due to vehement
protests from various sugar federations, James Ledesma, Head of SRA
suspended, August 30, the implementation of Sugar Order No.8, stating that
“We need more discussions with all the industry stakeholders, so it’s
better to listen to them first”.
Two other
organizations of big sugar landowners, the National Federation of Sugar
Planters (NFSP) and Negros Del Norte Planters Association Inc., have also
opposed the continuation of the Php 2 lien.
Arceo said that they
would not oppose the PhP 2.00 levy if it is used to fund a campaign to
curb the smuggling of sugar and the formation of an Anti-Smuggling Task
Force.
Arceo said “If spent
for the right purpose and managed by honest, corrupt-free leaders, the
estimated Php 80 million we could generate annually from Php 2.00/lkg
lien, would be enough to run after big smugglers.”
Hope for the
industry
On the upside of the
industry, Arceo hopes that the government is serious in developing ethanol
as alternative fuel. According to Arceo, the production of ethanol may
save the sugar industry in case the 2010 removal of tariffs on
agricultural imports becomes irreversible.
He said that the
development of ethanol production will inject new life to the dying sugar
industry. The demand for sugar will increase. But instead of producing
raw sugar as a finished product, the sugar industry will be geared towards
processing sugar directly to ethanol fuel. Not only will it save the
industry, the production of ethanol could also save the country a lot
especially in the face of rising prices of imported petroleum products.
“Other than ethanol,
there are still numerous sugar by-products, which if fully harnessed, with
the support of government, would keep the viability of the industry, and
spur more jobs for our people,” Arceo concluded. Bulatlat
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