This story
was taken from Bulatlat, the Philippines's alternative weekly
newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. V, No. 30, September 4-10, 2005
Total Collapse
of Sugar Industry by 2010 Feared
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. If the government adopts a regulation
policy, then the sugar industry might survive, according to small sugar
landowners.
By Karl G.
Ombion 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 © 2004 Bulatlat
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