US Farm Bill and PH sugar

SHINING examples of law enforcers: The sight of a policeman in full uniform reporting for work early in the morning aboard his motorcycle is a comforting sight. He gives the impression that our law enforcers are dedicated to the performance of their duties in preserving the peace and order in society and in protecting our citizenry against lawless elements.

However, when you notice that he is not wearing the required helmet and that his motorcycle does not have a license plate or even just a flippant compact disc, your good impression of law enforcers is ruined.

This definitely is not an isolated case. Anyone with a Facebook account has probably seen, shared or commented on the photo of a helmetless man with the big letters “LTO” emblazoned at the back of his blue t-shirt, riding aboard a motorcycle with no license plate.

If the law enforcers themselves openly violate the law, how can we expect our citizens to respect the law and those who enforce it? Hopefully, NOPPO chief Allan Guisihan, BCPO chief Ric dela Paz and LTO head Renato Novero will crack the whip on these errant personnel.

- 0 – 0 -

US Farm Bill and PH sugar: One of the raging lobby wars in the US which directly impacts Philippine sugarcane growers, most of whom are in Negros Occidental, is the pending bill in the House of Representatives for the renewal of the US Farm Bill.

The US Farm Bill contains the long-standing US sugar program under which the Philippines has been exporting sugar to the US.

For Philippine sugar producers, the US is a premium sugar market where sugar prices are always higher than in the world market. Traditionally, world market prices are low because it is the dumping ground of excess sugar production of countries which heavily subsidize their sugar producers.

To illustrate the gap between US and world sugar prices, let me cite figures from an article forwarded by Nicky Ledesma (Thanks, Sir Nicky!). It was entitled “U.S. sugar program pitting growers against soda and candy firms” written by Kim Geiger and published in the Los Angeles Times on July 6.

The article stated that refined sugar in the US sold at 59.5 cents per pound last May while it was priced only at 25.5 cents a pound in the world market. If shipping cost of 5 cents a pound is added to the cost of foreign sugar, the landed cost of imported sugar in the US will only be 30.5 cents.

At P42/US$1, a kilo of sugar in the US cost P55 last May. It cost only P23.56 per kilo in the world market and would have cost P28.18, if the shipping cost to the US is included. That’s a premium of more than half the world market price last May. Who would not want a part of that market?

US Agricultural Counselor Philip Shull disclosed over lunch at Mushu last February that Philippine sugar exports to the US in 2011 amounted to $263 million or P11 billion. This year, sugar exports to the US are expected to be within that level, barring any abnormal strengthening of the peso against the dollar.

Last crop year, the US quota was 212,505 metric tons, comprising of the regular 137,000 mt allocation plus the additional quota awarded to the country. This crop year’s US quota is approximately within the same volume as last crop year, considering that the country also received an additional 75,540 mt allocation last April on top of its regular quota.

This crop year, 8% of sugar production was allocated to the US quota. Out of the Philippine sugar production of 2.235 million mt as of June 17, approximately 179,000 mt was earmarked for export to the US. While there might be a shortfall of more than 30,000 mt between the 8% allocation and the US commitment this crop year, rest assured that SRA chief Gina Martin can find ways to fill the gap.

September 1 marks the start of another campaign for the Philippine sugar industry. SRA will once again issue a sugar order allocating sugar production. Will the US quota remain at 8% of production? Maybe the bigger question is: will there still be an allocation for the US quota?

The answer to this question lies in the votes of US congressmen. Will the US Congress renew the Farm Bill and thus continue the US sugar program?

Cane Points will keep you posted on this issue. Thanks to friends like Nicky Ledesma and Maning Diaz in California who regularly send me sugar industry related news items, we can keep our readers updated.

(For suggestions and reactions, email bbacaoco@yahoo.com.)