Sugar industry stakeholders are hoping President Ferdinand Marcos Jr. will approve a proposed government-led sugar buying program soon to address the problem of oversupply.
They were informed that Agriculture Sec. Francisco Tiu-Laurel Jr. has endorsed the proposal of the sugar industry stakeholders to President Marcos, Aurelio Gerardo Valderrama Jr., president of the Confederation of Sugar Producers Association (CONFED), said in a press statement on Tuesday, April 7.
“We are hopeful that because Sugar Regulatory Administrator Pablo Azcona has assured me that DA Sec. Tiu-Laurel has submitted our manifesto to Malacañang, President Marcos will act on the government-led buying program without delay for the benefit of all stakeholders,” Valderrama said,
The proposed program is designed to address the over-supply of sugar in the country, he said.
The SRA supply-demand report dated March 22 shows that the raw sugar net ending stock is 668,405MT, which is 17.5 percent higher than last crop year. Meanwhile, refined net ending stock is 506,804MT, which is 38.77 percent higher than the previous year, the CONFED press release said.
“The over-supply was caused in large measure by the excessive importation of refined sugar. Inevitably, this led mill gate prices of locally produced sugar to plunge,” it said.
The proposed government-led buying program, also known as the “Purchase and Park Program”, was contained in a manifesto signed by leaders of all sugar federations, millers and refiners, labor, ARBs, and allied NGOs.
It was endorsed by Azcona to Tiu-Laurel in March, for submission to the president for action, the CONFED statement said.
“After a month, farmers have become desperate on the status of the program and have been consistently following up on it,” Valderrama said.
Valderrama stressed the urgency of the implementation of the government-led buying program.
“We need to immediately take out the excess sugar in the market to bring stocks to a reasonable and profitable level. Whatever excess is taken out should also be refined to further delay, if not render unnecessary, the importation of refined sugar,” he said.
Valderrama also cited as contributing factor the rise in prices of petroleum products due to the conflict in the Middle East, which might lead farmers to reduce their hectarage for the next crop year.
Overall industry productivity could drop precipitously in Crop Year 2026-2007 if farmers reduce their planted hectarage now, Valderrama said.
If this happens, he warned, government might decide to import even more refined sugar, leading the industry into a tailspin from which it might not be able to recover, he added.
The potential problem will affect not just big producers, many of whom have already surrendered their leased farms. Valderrama said.
Small farmers and agrarian reform beneficiaries, now comprising approximately 85 percent of the total number of sugar producers, will not have the funds to continue planting; many cannot even pay their loans anymore, he said.
While farmers will surely carry the brunt of the losses, they are not the only ones affected by reduced productivity, Valderrama pointed out.
With less tonnage to harvest, labor in farms, mills, and refineries will be seriously reduced. Up to 63 percent of total production comes from Negros, Valderrama pointed out.
“As of the March 22 Supply-Demand report, combined foregone revenues from the drop in prices of both sugar and molasses are estimated to have reached over P12.8Billion. Imagine 63 percent of that money taken out of circulation from the local economy of Negros. Are the LGUs ready for this?” he said.
“The government-led buying program is not a dole out. It is not an “ayuda”. Rather, it is an investment,” Valderrama said.
More significantly, it is a critical move that will benefit producers, millers and refiners, industry workers and other dependents, consumers, and the government itself, which stands not only to recover its investment but to make a modest trading profit, he said.
Former Negros Occidental governor Rafael Coscolluela said with the low millgate sugar price and the hike in fuel prices there could be less sugarcane planting for the next crop year.
“It does not look very good for the next crop unless a certain level of confidence is restored,” he said.
“The first to be affected will be the laborers,” he warned.*
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