Delaying mill opening to September 1 ‘good for small planters,’ SRA says

(Image from Mehmet Turgut Kirkgoz of Pexels)
(Image from Mehmet Turgut Kirkgoz of Pexels)

SUGAR Regulatory Administrator Pablo Azcona said Thursday, July 27, that delaying the mill opening to September 1 is good for the small planters.

"This is based on two premises - higher yield and correspondingly, increase in revenue for our sugar farmers, particularly the smaller ones that we need to protect," Azcona explained.

Azcona made the clarification in a press conference Thursday, July 12, in reaction to the letter sent to him by a group called the Sugar Council, composed of three sugar federations - the National Federation of Sugarcane Planters (NFSP), Confederation of Sugar Producers Associations, Inc. (Confed), and PanayFed.

Azcona said that the media release of the group came as a surprise since this advisory was relayed to all sugar mills as early as May.

"I have met with all three concerned federations individually, post that issuance of the deferment memo," Azcona said.

Of the nine sugar mills in Negros, only one protested the delay in the reopening of sugar mills to September 1, and since majority agree to the memorandum, he also said.

So we expect everyone to adapt to the new schedule, he said.

In fact, Azcona said the September 1 mill reopening is the first in a series of deferment of dates in the next three years to go back to the original mill opening which is October 1.

"By 2025, we will be back on track with the hope that our annual production will increase," he also said.

Azcona said they conducted a simulation of the August and September production last year wherein August figures showed 432,000 tons of cane were milled with an average of 50-kilo bags/ton of cane (LKg/TC) at an average price of P2,800 per LKg bag of sugar or a total of P1.8 billion in revenues.

"The same volume of canes milled a month later, yielded an average LKg/TC of almost 1.7 at an average price then of P3,300 per LKg bag of sugar or a total of P2.5 billion," he pointed out.

"It's a big difference of about P700 million which could have been additional income for our farmers, especially since most if not all of those who milled in August of last year were our small farmer-beneficiaries," Azcona said.

Regarding the issue of an overaged cane, if milling is delayed to September 1, Azcona said he checked SRA records which showed that "only one mill has constantly opened ahead of everyone, and records show this mill would open in August this year, and September the next year and back to August, clearly showing that this issue is non-existent, and the opening date is purely based on competition for cane supply."

On the issue of sugar supply, "We have enough sugar to last us till the reopening of the mills on September 1, it was an opportune time to move back the date to increase yield," the Negrense administrator said.

"We took notice of the Sugar Council's apprehension regarding the cash flow of small farmers for the month of August and I have ordered the SRA to look into the possibility of providing assistance, food, or subsidies to our small farmers who will need help," he added.

He said the newly appointed member to the SRA Board representing the planters, Dave Sanson has been doing the rounds of consultation with small farmers and so far, "everyone is amenable to moving the date to September 1 if it promises better yield and income for them."

"We want to veer away from dependency on sugar importation and improve our productivity as soon as possible, and if allowing canes to grow longer to have better yield is one solution, then SRA will implement it bearing in mind the advantages it will give to the small farmers especially," he added.

Azcona further said that he will meet with sugar millers soon to also propose to them to make this date deferment "an opportunity for them to leverage themselves to sugar farmers."

"If mills can provide early assistance to farmers in lieu of assured cane supply when milling starts, then it will also give our farmers an opportunity to choose where to mill based on best offer and best performance, thus a better business sense for mills to improve their capability as well," Azcona said.

"If we want to be serious about increasing productivity and improving the lives of our sugar farmers, then we should unite as an industry and look at the bigger picture rather than just our own interests," he added.

NFSP, in a letter to Azcona this week, relayed the appeal of the majority of its member-planters to the SRA to jumpstart the milling season in mid-August, citing the sugarcane farmers’ need for income after several months of lack of income from their farms.

Among the reasons highlighted by NFSP members, many of whom are marginal farmers, according to Rojas, is their need for fresh income, considering that numerous sugar mills stopped milling in April this year.

An overwhelming majority of the almost 100,000 sugarcane farmers in the country are marginal, subsistence farmers who rely solely on income from their farms for their livelihood, he said.

“Hectares of standing canes, which were planted earlier than usual because of the early milling last year, are due for harvest in August,” Rojas stated.

“Some farmers have already contracted cane cutters, and delaying milling will force them to financially support the workers or risk losing them. Moreover, the simultaneous start of milling in September can create an overwhelming demand for workers and hauling services, which can result in unhealthy competition, and can drive up the production costs,” Rojas further explained.*

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