This story was taken from Bulatlat, the Philippines's alternative weekly newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VII, No. 3, Feb. 18-24, 2007

Pro-Arroyo Landlords in Congress to Reap Profits from Biofuels Act

The Biofuels Act by itself cannot address the most urgent problem of exorbitant and soaring oil prices caused by foreign monopoly control. Worse, only landlords and bourgeois-compradors like Rep. Juan Miguel Zubiri and his co-authors are the ones who will benefit most from it.

BY ARNOLD PADILLA

IBON Features

Posted by Bulatlat

Going by the hype created by its passage, Republic Act (RA) No. 9367 or the Biofuels Act of 2006 is the silver bullet that would end all our energy woes. In fact, the law's principal author, Rep. Juan Miguel Zubiri (Lakas, 3rd district of Bukidnon) is now capitalizing on the Biofuels Act to boost his senatorial bid.

Unfortunately, the law cannot address the most urgent problem of exorbitant and soaring oil prices caused by foreign monopoly control. In the final analysis, only the landlords and bourgeois-compradors like Zubiri and his co-authors are the ones who will benefit the most from the Biofuels Act, a law that was enacted at the expense of genuine agrarian reform.

Most ardent supporters

The Biofuels Act aims to maximize the production of sugarcane and coconut in the country to supply the needs of bioethanol and coco-biodiesel. Sugarcane has been identified as one of the primary sources in producing bioethanol which under the law is required to comprise at least five percent of the total annual volume of gasoline sold and distributed in the country within two years from the effectivity of the Biofuels Act. Coconut, on the other hand, will serve as the feedstock for biodiesel that the law mandates to account for at least one percent of all diesel engine fuels within three months into the law's effectivity.

Aside from Zubiri, among the most ardent supporters (i.e., co-authors of the bill) of the Biofuels Act in Congress are some of the biggest landlords and bourgeois-compradors in the Philippines. When the law was still pending in Congress, they started to position themselves in the biofuels business which is expected to be lucrative. These politicians and their families and/or their landlord/bourgeois-comprador patrons are the ones who stand to gain from the government's biofuels program at the expense of farmers and farm workers.

Zubiri himself has an interest in the sugar industry of Bukidnon. His father – who was Bukidnon's third district representative (1987-1998) before his son took over and is now the province's governor – was executive vice president of the Bukidnon Sugar Milling Corporation (BUSCO) from 1975 to 1988. Zubiri admitted that BUSCO has been working on feasibility studies as early as 2005 for facilities that work both as an ethanol distillery and sugar mill in anticipation of the Biofuels Act.

Another author, Rep. Herminio Teves (Lakas, 3rd district of Negros Oriental), has been pushing for the construction of a projected P2-billion ($41.6-million, based on an exchange rate of P48.10 per US dollar) integrated production complex for ethanol in Negros Oriental. The complex would span four municipalities (Sta. Catalina, Siaton, Valencia, and Sibulan) covering 214,116 hectares of government land. The proponent of the project, the Tamlang Valley Agricultural Development Corp., is 35 percent government-owned while 65 percent is controlled by a consortium composed of alcohol distillery Tau Commodities and Teves' own family.

Teves, who owns agricultural lands in Sibulan, Tayasan, and Sta. Catalina (all in Negros Oriental) is also involved with Tolong Sugar Milling which is based in Sta. Catalina.

Increased production

Sugarcane production is expected to increase to meet the requirements of the Biofuels Act. At present, the sugar industry can only supply 79 percent of the needs of the five-percent bioethanol blend which is between 200 and 400 million liters per year. The country therefore needs to expand the current 167,300 sugarcane farms in the country covering a total area of 344,700 hectares to meet the bioethanol demand.

Estimates show that to produce a minimum of 120,000 liters of ethanol daily, a sugarcane plantation needs 7,000 to 8,000 hectares aside from the 10 to 20 hectares for each ethanol processing plant. The Sugar Regulatory Administration (SRA) already identified 237,748 hectares of new sugar fields, mostly in Mindanao, that can be tapped to produce ethanol for fuel. These are found in Maguindanao (69,550 hectares), Agusan del Norte and Agusan del Sur (45,000 hectares), Palawan (20,808 hectares), Saranggani (19,700 hectares), Lanao del Norte (19,035 hectares), Cagayan (16,918 hectares), South Cotabato (15,000 hectares), Isabela (12,337 hectares), Masbate (8,000 hectares), Bohol (6,400 hectares), and Kalinga (5,000 hectares).

Aside from developing sugarcane production for ethanol, government has also announced its plan to launch massive propagation and cultivation of jathropa seeds covering around two million hectares of unproductive and idle public and private lands nationwide in order to produce some 5.6 billion liters of biofuel in the next 10 to 12 years.

To implement the project, government will provide lands to PhilForest Corp., corporate arm of the Department of Environment and Natural Resources (DENR), under a 25-year stewardship program. Philforest has opened pilot plantations or nursery, in partnership with the Department of Agrarian Reform (DAR), in Carmen, North Cotabato (5,000 hectares); Isabela, Cagayan (900 hectares); Pili, Camarines Sur (20 hectares); Tigaon, Camarines Sur (20 hectares); and Davao City (50 hectares). It is also negotiating with the DENR for additional jathropa nursery areas in Regions I (Ilocos), II (Cagayan Valley), V (Bicol), and XIII (Caraga) covering 167,107 hectares of land.

More landlessness

According to the pro-biofuels lobby group Philippine Fuel Ethanol Alliance, increased ethanol production in the country would create additional 300,000 new jobs. But the biofuels program, in the long run, threatens to aggravate joblessness in the countryside because the imminent loss of the farmers' land is a real threat under the Biofuels Act.

An official of the Department of Agriculture (DA) admitted that the conversion of sugar haciendas for ethanol production will be a major consideration of the DAR in the exemption of lands under the Comprehensive Agrarian Reform Program (CARP). Because of rising oil prices, ethanol production is now considered a strategic investment by the National Economic and Development Authority (NEDA) and the DAR must therefore take into account the supposed "economic benefits" of ethanol business ventures as against the actual physical distribution of lands to farmer-beneficiaries.

At present, 55,285 sugarcane farms in the country covering 83,772 hectares are either tenanted, leased, or under various forms of tenurial arrangement while 799,700 coconut farms with an area of 1.02 million hectares are in the same situation. Overall, 3.42 million farms covering 3.10 million hectares are either tenanted, leased, or under various forms of tenurial arrangement. These figures do not fully reflect the extent of non-ownership of agricultural lands in the country considering the flaws in the reporting methodology of government and flawed definition of ownership under the CARP.

Landlessness is bound to worsen as landlords, including those who helped author the law, would surely apply for land-use conversion, CARP exemption or use other schemes such as corporative arrangements, contract growing, joint venture and lease arrangement under the biofuels program. In a newspaper article, for instance, Task Force Mapalad claimed that Rep. Iggy Arroyo (Kampi, 5th district of Negros Occidental) has been conditioning the minds of farmers in the family-owned Hacienda Bacan in Negros Occidental that the said landholding would be exempted from the CARP under the biofuels law. Arroyo, one of the Biofuels Act's co-authors, reportedly said that the 157-hectare hacienda would be converted for ethanol production and thus exempted from CARP.

Furthermore, while the jathropa program only targets "unproductive and idle" lands, there is no guarantee that even lands covered by CARP, or even lands of CARP beneficiaries, would not be included for jathropa production considering the promise of high returns from such agribusiness venture.

PhilForest estimates that an investor in a jathropa plantation could reap a 20 percent return on investment on a petroleum price of only $46 per barrel and could further increase as global oil prices go up. This was the case of the contract growing scheme of San Miguel Corporation (SMC) in Isabela, northern Philippines which promised huge profits and enticed not only the targeted holders of stewardship contracts but also the Emancipation Patent (EP) and Certificate of Land Ownership Award (CLOA) holders. Instead of profits, the farmers incurred huge debts that now threaten their control and ownership because the contract stipulates that the cooperative commissioned by SMC to supply its cassava needs can take over the land of farmers who incur debts for two consecutive harvest seasons.

Genuine energy security

There is no doubt about the need to explore, develop and use alternative sources of fuel if the country intends to achieve energy security and independence, as well as long-term, sustainable national economic development. But the Biofuels Act, conceived with the narrow and self-serving interests of landlords and bourgeois-compradors, cannot address the most urgent issues that threaten the country's energy security, namely exorbitant and soaring oil prices and intense foreign monopoly control in the upstream and downstream of the energy industry.

Energy independence can only be achieved if energy resources are effectively controlled and managed by the people through the state, and not by the landlords, bourgeois compradors, and foreign corporations. A pro-people alternative fuels program should not allow the wanton conversion agricultural lands for biofuels production and ensure that genuine agrarian reform would not be compromised. It will also ensure sustainability because potential crops that would be used as alternative fuels would be truly developed, including protection from unnecessary competition brought about by liberalization.

Finally, even a genuine alternative fuels program would not bring immediate relief to the economy and people battered by exorbitant oil prices and unabated oil price hikes. The most urgent problem today as far as oil is concerned is prices and the only reform that can bring instant and meaningful solution to this problem is to reverse the oil deregulation policy and institute price control. Posted by Bulatlat 

© 2007 Bulatlat ■  Alipato Publications

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