Agrarian Reform beneficiaries who plant sugarcane on their awarded landholdings should consolidate their lands to plantation sizes to make sugarcane production successful, with the projected entry of tariff-free imported sugar due to the full implementation of the Asean Free Trade Area (AFTA) agreement.
Sugar Regulatory Administration (SRA) Administrator Gina Martin made this suggestion to Agrarian Reform beneficiaries from Tanjay, Pamplona, Bais, Manjuyod and Mabinay in a forum at the Bais City Public Market last Thursday.
The forum, held in cooperation with the City of Bais and the Department of Agrarian Reform, was the fifth forum organized by the Negros Oriental Chamber of Commerce, the Negros Oriental Business Development Foundation, Department of Trade and Industry.
Martin said that sugar is a plantation crop and planting sugar on one or three-hectare landholdings will not augur well for the sugar industry if it has to compete with other sugar producing countries like Thailand and Brazil.
“What the Department of Agrarian Reform is distributing, we are consolidating,” Martin said.
Under the Comprehensive Agrarian Reform Program, the government bought sugarcane plantations and distributed the lands to the tillers. Most agrarian reform beneficiaries each occupy about one hectare of land.
The Department of Agrarian Reform, said DAR undersecretary for support services Jerry Pacturan in the same forum, has a program for farm mechanization, where they will provide tractors to state universities and colleges or the private sector, to be used as a business tool for farmers.
One hectare of land, Martin said, is not enough for mechanization. The lands for sugarcane have to be the size of plantations so they can be properly and professionally managed, she explained.
The Philippines has 480,000 hectares of land planted to sugarcane and there are 28 sugar mills in the country. In contrast, Brazil has six million hectares of sugarcane and 430 sugar mills.
Mario Palma, operations manager of the Universal Robina Sugar Milling Company based in Manjuyod, Negros Oriental, said the ASEAN region is the number one buyer of Brazil sugar. “Brazil can compete with pricing because of low production costs,” he explained. He presented figures that the cost of making sugar in the Philippines is 18 cents per pound, in contrast with 15 cents per pound in Brazil.
Palma also cited Thailand, which planted only 400,000 hectares of sugarcane ten years ago but is now planting 1.5 million hectares to sugarcane.
“Majority of land sizes in Thailand is between five to 10 hectares but they are well managed,” Palma said.
At no other time has the need to improve the efficiency of the sugar industry been felt as this time when countries are preparing for the implementation of tariff-free trade by 2015.
Imported sugar is currently taxed 28 percent. That will go down to 18 percent next year, 10 percent in 2014 and only five percent in 2015.
This means that the cheap sugar produced by Brazil and Thailand could outsell the higher-priced Philippine sugar even in the domestic market.
On top of finding ways of lowering the cost of producing sugar, the cost of shipping has also become another concern for sugar producers and other traders.
“Shipping costs $40 per ton from Brazil to India but it costs $31 per ton to ship from Negros Oriental to Manila,” Palma said.
Aside from costs, the panelists said government also needs to revisit its policies regarding CARP, environmental laws and the minimum wage law.
Another challenge is the diminishing labor force brought about by the emergence of big shopping malls and call centers and then there’s also the uncertain weather condition.
The bright spot for the Philippines, Palma said, is the unfilled demand for white sugar in Indonesia and China.
Rep. Josy Limkaichong, co-author of the Sugarcane Act of 2012, said the Philippines used to be the number one exporter of sugar but is now lagging behind several countries.
“But it’s never too late. Sugar is not a sunset industry,” Limkaichong declared.
Pondering on the effects of AFTA, DAR USEC Pactoran said this “can be like a storm to hit us. But life is not just about waiting for the storm. It is learning how to dance in the rain.”
