Gonzaga: Sugarlandia

Ecoviews & Issues

SUGARLANDIA, the term inevitably points to Negros Island, which to this day is known as the "Sugar Bowl" of the Philippines. Several conditions combined, some by chance, some by design, created favorable milieu for widespread cultivation in the 1870s. As noted by the newspaper EL Provenir, (Nov. 15, 1890) : 1) excellence of the land, 2) facility and cheapness of its acquisition, 3) cheapness of labor, 4) good prices of sugar (there were no sugar beets at the time). By the late 1880s, the annual exports of Negros was reported in the Memorias de Negros Occidental (1891) to have reached as high as one million piculs of sugar.

Today, in the 21st Century, it is nearly all the contrary. Land acquisition has become onerous, and expensive, labor cost is the highest among sugar producing countries, and the prices of sugar in local and world markets have seesawed up and down during the first two decades of this century. The passage of the Comprehensive Agrarian Reform Law and its implementation which covered all agricultural lands, including sugarland, gave the final blow to the Philippine Sugar Industry, especially Negros.

Sugar was one of the important agricultural commodities and its largest importer was the United States. In the 2000s, it remains an important agricultural export product of the Philippines, though, the local sugarcane industry has shrunk down compared to its peak periods. The industry experienced ups and downs throughout the past two decades and it has been struggling to stabilize its sugar production to meet the local and the US demand.

For the Philippines, its priority is to satisfy local demand for sugar and to meet the import quota for the US market. Domestic supply and demand of sugar are estimated every year, and the government affiliated regulatory body, the Sugar Regulatory Administration (SRA), oversees and controls the overall supply of sugar. Through Promar team field study report entitled, "Changes in the Sugarcane Industry in the Philippines" the following factors were identified as challenges that sugar production has been facing:

* adverse climate change effects (El Niño, La Niña, and typhoons)

* fragmented sugarcane farmland under the agrarian reform

* labor shortage (especially during harvest season)

* lack of infrastructure

* delay in farm mechanization

* lack of financial assistance

What made matters worse for sugarcane planters was the passage of a new tax law which included an excise tax on sweetened beverages. The new tax applies to certain drinks with added sugar such as soft drinks and energy drinks which contain caloric and/or non-caloric sweetener (mostly sugar and/or high fructose corn syrup as well as aspartame).

It is anticipated that the increased price of sweetened beverages would drive consumers to make fewer purchases and reduce sugar intake accordingly. With the new law effected in January 2018, beverages containing caloric and non-caloric sweeteners (e.g. sugar, aspartame, etc.) are now taxed at 6 pesos per liter and beverages containing high fructose corn syrup have been taxed at 12 pesos per liter.

While the identified challenges are difficult to overcome, efforts have been made by the stakeholders of the sugarcane industry, primarily the millers. Some sugarcane millers have collaborated with local farmers by providing training courses to help planters increase their yield. On the part of legislators, a new law was passed in 2015 to revive local sugarcane industry which provides government financial assistance to infrastructure, farm mechanization, etc. Still, the implementation of this law is almost nil.

While the local sugar industry faces grave threats from the Duterte government itself-that is, the threat to liberalize the sugar market, no reliable socio-economic research data base exists to counter the strong push of classical economists for free sugar trading. Yet, the fact that the sugar industry receives no subsidy from government, unlike rice and corn for instance. In contrast, Thai sugar producers receive heavy subsidies from their government, so does beet sugar producers in US and Europe. But how can planters immediately affected by liberalization effectively oppose the push by Budget Secretary Benjamin Diokno, Neda head Ernesto Pernia, and Finance Secretary Sonny Dominguez for laizzes faire treatment of sugar trading?. With the absence of an updated, substantive social research data base, planters will just be one among the cacophony of unheard voices "shouting in the wind."


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