NFSP slams Neda study on sugar industry reforms

"The National Federation of Sugarcane Planters (NFSP) professes its objections to the policy recommendations contained in the study on institutional reform of the sugar industry," said NFSP president Enrique Rojas.

Rojas was reacting to the study titled "Study on Institutional Reform in the Philippine Sugar Industry," conducted by the Brain Trust: Knowledge and Options for Sustainable Development (Brain Trust Inc.) for the National Economic and Development Authority.

Results of the said study were presented during a virtual forum attended by different representatives from the government and private sector last July 28.

NFSP was represented by lawyer IƱaki P. Larrazabal Jr., NFSP vice-president for Eastern Visayas and president of the Ormoc Sugarcane Planters Association (Ospa), and lawyer Roy Bernard C. Fiel, Ospa vice-president.

The study's 16-page executive summary contained an analysis of the sugar industry, the institutional and governance framework and challenges facing the industry, an assessment of trade liberalization scenarios, a synthesis and recommendations.

Among the recommendations on policy reforms are: 1) Pursue conversion of the industry to a cane purchase system; 2) Phase-out the sugar classification system and move toward a single unified quedan; and 3) Pursue a phased easing of sugar trade restrictions.

The study calls for strengthening the Sugar Regulatory Administration by redefining its roles and functions in line with the Sugarcane Industry Development Act, expanding membership of the SRA Board to include representatives from block farms and user industries, enhancing SRA's revenue base, and strengthening its partnership with the private sector institutions.

It also calls for the strengthening of the industry's institutional support mechanisms by adopting SIDA institutional provisions and re-aligning existing formations, such as the Sugar Industry Roadmap, and strengthening the participation of LGUs and block farms in planning, program identification and execution.

Moreover, the study calls for the updating of the industry road map to include sugar users and the development of a mill modernization and investment program, making representations to streamline and expedite the implementation of SIDA programs, and committing to more ambitious, measurable targets for SRA.

NFSP opposes the proposed mandatory cane purchase system, as it will infringe on existing contracts of several stakeholders in the industry and will also impinge on valued traditional relational arrangements between planters and millers.

Instead, NFSP proposes that the cane purchase system can be presented as a voluntary option for interested parties. In stand-alone milling districts where farmers do not have sufficient negotiating power, NFSP proposes a tripartite negotiations involving the farmers, the miller and government representative, so that farmers, specially the small ones, can be protected.

"The SRA can issue the relevant guidelines for cane purchase arrangements, which should include the imposition of a tripartite price management mechanism involving planters, millers and government," added Rojas.

On the proposal of a single unified quedan, NFSP also registered its opposition, as the country needs to maintain its export commitments, especially with the United States, which serves as a solid buffer against fluctuations in the world and domestic sugar markets.

NFSP reiterated the need for SRA to continue exercising its power to regulate prices, for the benefit of both producers and consumers.

Otherwise, traders, who can impose logistical controls on supply, may possibly dictate sugar prices. On the other hand, consumers and other users are already amply protected under other laws imposed by the Department of Trade and Industry (DTI), Anti-competition Commission and other governmental agencies.

Further, NFSP opposed the proposed phasing out of sugar trade restrictions.

"Unless and until the government can give subsidies equivalent or commensurate to the subsidies given in other sugar-producing countries, any attempt to lift quantitative restrictions and tariff barriers will only spell the death of the Philippine sugar industry," NFSP stated in its position paper submitted to Neda, through Brain Trust Inc.

"We agree that there is a need to have a holistic perspective in approaching development challenges of the sugar industry. Focusing the study on the quedan, miller-planter relationship and importation to disrupt supply principally takes the side and perspective of the consumer. There is a need to evaluate and study the whole supply and value chains within the industry so that a more productive and efficient farmer will ultimately redound to the benefit of the industry, the consumer and the whole national economy," NFSP stated.

"We agree to the findings of your study that trade liberalization of sugar is not yet proper at this time. However, should government, in the future, pursue this policy, we have to insist that government subsidize the industry like our competitors (sugar exporter) or impose hefty tariff on sugar imports, which should be used for the benefit of the various stakeholders of the sugar industry," NFSP added.

"NFSP will continue to fight for the welfare of the sugar farmers and for the well-being of the entire sugar industry. Rest assured that we will use our collective voices to make our economic managers listen to and appreciate the plight of our producers and our industry," Rojas emphasized. (PR)


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