By Madelaine B. Miraflor
TALISAY, Negros — Congressmen from the sugar producing region are set to conduct a probe on the proposed liberalization of the sugar sector as well as the under-utilization of the Sugar Industry Development Act (SIDA) funds.
Gerardo Valmayor Jr., representative of 1st District of Negros Occidental, said they will summon officials of the Department of Finance (DOF) to explain the proposal to lift the quantitative restrictions (QR) on sugar imports, which will allow the free-flowing entry of cheaper imported sugar from other countries. The inquiry will be called after the Halloween break.
The DOF must be able to explain why they suggested to liberalize sugar importation, he said.
“I want to hear from them why they suggested it and if they think we can do it. Is this good for economy? Will this make the economic growth inclusive?” Valmayor said in a briefing here.
In one of its previous economic bulletins, DOF said the liberalization of sugar industry could bring down the retail cost of sugar in the local market, stressing that the high effective protection rate (EPR) of the Philippine sugar industry has been penalizing consumers and deterred the growth of downstream industries.
“The restricted level of imports directly affects the level of domestic prices. Although the ATIGA tariff rate on sugar is only 5 percent, the direct action of limiting import volumes increases the level of protection far beyond the 5 percent tariff rate,” the DOF said.
“For the past eight years, quantitative restrictions imposed on sugar imports raised the wholesale price of refined sugar to 235.8 percent above the export price of Thailand and 393.2 percent above FAO reported prices. This means that consumers and downstream industries have been paying more than twice (or thrice using FAO prices) the global price for the commodity,” it added.
Valmayor said he would like Finance Secretary Carlos Dominguez to attend the congressional hearing on sugar.
Aside from the DOF, Representative Francisco Benitez said the congressional hearing that will happen "sometime in November" will also summon officials of Sugar Regulatory Administration (SRA), Department of Agriculture (DA), Department of Trade and Industry (DTI), among other agencies involved in the issue.
Some groups have argued that allowing the entry of more imported sugar into the country will kill the local sugar sector because the cost of locally produced sugar still remains relatively high due to lack of mechanization.
"With what is happening now, ARBs will be most affected. They have the most to lose," Benitez said. "You promised them land, and then you don’t give them the support, they will end up selling their lands again."
Under the government’s Comprehensive Agrarian Reform Program, the Philippine government must redistribute private and public agricultural lands to "landless farmers and farmworkers" and encourage them to operate as small independent farmers.
Benitez feared that pushing for liberalization could result in insurgency among the farmers.
"The state didn’t give them the necessary support. And now they are liberalizing," he further said.
According to him, the lower House would "make sure that SRA is functioning properly". It will also look into the issue of profiteering in the sugar sector.
More than a decade
Eddie Jungco, a small farmer in Negros, said that in the last sugar crop year, which ended in August 31, he only earned about P16,000 — his total earnings for the last 12 months.
Jungco, a member of Task Force Mapalad, has joined the panel of sugar producers and congressmen in a press briefing here to jointly oppose the plan to liberalize the sugar industry. His group is composed of Agrarian Reform Beneficiaries in Negros.
“Our labor cost was too high because it’s all manually done,” Jungco said in Filipino. “We don’t really make money.”
Jungco, who owns 0.64 hectares of farm land, had to spend P52,000 to P56,000 for his sugar plantation, for a mere P72,000 gross income.
He said the money that he made in the last sugar crop year was not even enough to buy rice for his family of three kids.
When the last sugar crop year ended in August 31, the average millsite price of raw sugar in the domestic market was at P1,530 per 50-kilo bag. As of October 13, the millsite price stood lower at P1,521.77 per 50-kilo bag.
While waiting for harvest, Jungco said he took up extra jobs. He also raised a few pigs donated to him by a politician.
He said he hopes the government will finally help them mechanize their operations, a move that will reduce their production cost.
But the thing is it might take more than a decade before the sugar industry can be competitive, Raymond Montinola, spokesperson of Tatak Kalamay, said.
"It took Thailand 50 years to be globally competitive and they are still working on it," Montinola said.
Tatak Kalamay represents more than 300,000 individual members in the sugar industry – from farmers, producers, millers, ARBs, block farmers – across different parts of the country.
“It will take years before we can be ready for liberalization, we are up to the challenge,” Montinola said.
But, he equally stressed that government must do its part first. According to him, the DA must live up to its promise to modernize and mechanize the sector. Government subsidies will also help, he said.
Because of government subsidies and mechanization, Thailand is now one of the largest sugar producers in the world.