Integration ‘to put sugar farmers at risk’-A A +A
Sunday, September 1, 2013
WHILE government efforts are being put in place to prepare farmers for the tough competition with the regional economic integration in 2015, sugar farmers feel threatened by the influx of cheap sugar from Thailand, which can pull down domestic prices.
In a press conference, Earl Parreño of the Social Enterprise Empowerment for Rural Development, Inc. (Seed), noted that the integration by 2015 presents challenges to the local sugar industry particularly in Negros, which is the country’s sugar hub.
“We are threatened by the zero tariff regime. Production volume might drop if our sugar can’t compete well with the imported sugar from Thailand,” said Parreño.
The Philippine sugar industry will no longer be protected by a tariff wall when the free trade agreement under the Association of Southeast Asian Nations (Asean) goes into effect in 2015. Tariffs on raw and refined sugar imports are supposed to drop to five to zero percent in 2015 from 38 percent in 2010.
But Parreño said the real threat is when small local sugar producers are displaced or eliminated due to stiff competition from cheaper sugar from Thailand.
Every pound of sugar produced in the Philippines is pegged at 16-17 cents while those in Australia and Thailand is at seven to nine cents.
Parreño said the price discrepancy will impact the businesses of small sugar producers. He warned that if the government will not incorporate reforms in the industry, a “famine” similar to that in 1982 in Negros might happen.
Negros accounts for 60 percent of the sugar production in the country.
To address this, Parreño said they will negotiate with the Sugar Regulatory Administration (SRA) to issue a fair trade system on sugar. They will also reach out to and negotiate with the solidarity markets so consumers can buy sugar at solidarity prices.
The social solidarity economy (SSE) is a movement that seeks “to erect an economic model centered on people. It is based on practices of cooperation and solidarity between communities and groups, above individual actions or entrepreneurship. This economy produces goods, services, and knowledge while pursuing economic and social aims and fostering solidarity.”
Parreño believes fair trade will lessen the impact of the Asean economic integration particularly on small producers, as their products will be bought at a fair price.
He said they will also be issued with fair trade certification as proof that the production of sugar is done the fair trade way.
Twelve communities have already produced sugar the fair trade way and some 5,000 farmers have met the fair trade standard, he said.
Aside from engaging in a new system, Parreño said they will also reach out farmers to produce centrifugal sugar, as market for the muscovado sugar has become limited.
Coco water, virgin coconut oil, coconut flour, banana flour, and coffee are some of the breakthrough products in the social enterprise that have promising markets even with the Asean integration.
A two-day conference was recently held in Cebu to increase awareness on SSE.
Dr. Ben Quiñones, president of Asian Solidarity Economy Coalition in the Philippines, said the conference centered on knowledge and experience sharing among community enterprises and cooperatives in engaging the poor in economic development.
A key piece of legislation proposed by the SSE advocates is the passage of the Poverty Reduction Through Social Entrepreneurship Bill, which seeks to promote an economic planning that makes the poor in economic sub-sectors more productive and engaged in a humane and productive way.
“Policymakers can create legal and financial services, support, or even the creation of financial institutions specifically dedicated to the SSE,” said Jay Bertram Lacsamana, executive director of the Foundation for a Sustainable Society in a statement.
The bill is co-authored by Reps. Cresante Paez, Anthony Bravo and Teodor Baguilat and senator Benigno Paulo Aquino IV. Lacsamana said they will also reach out to Sen. Alan Peter Cayetano to support the bill.
Among the salient features of the bill include non-collaterized credit windows, market development, market research, tax incentives, and other business support facilities.
Published in the Sun.Star Cebu newspaper on September 02, 2013.