Corporate giant Victorias Milling Co. appears willing to lose hundreds of millions of pesos by extending additional milling incentives to attract individual planters to deliver their sugarcane to VMC for crop year 2021-2022, a press release from the Vicmico Planters’ Association Inc. said Sunday, November 21.
Industry sources indicated that VMC, fearing a reduced volume after unilaterally severing ties early this year with long-time business partner Vicmico Planters Association Inc. and consequently, with Vicmico Planters’ Multi-Purpose Cooperative, is giving milling incentives of as much as P300, or a total package of P550 per ton cane, to attract farmers to deliver their sugarcane to the mill, the press release said.
Aurelio Valderrama Jr., Vicmico Planters’ Association Inc. president, said VMC is desperate to secure substantial cane supply as it cannot assure itself of needed volume when it ended its decades-long partnership with the association after questions on transparency, mill efficiency and unreasonable penalties were raised by the planters’ group.
The association was held hostage to the whims of some officers and directors further sowing confusion and division among its planters/farmers and in an attempt to shutdown the association and ultimately the cooperative, Valderrama said.
Such moves, he added, are part of the under-handed tactics to make Vicmico Planters Association Inc. and Vicmico Planters MPC irrelevant just because they speak their minds out about the mill’s practices.
The VMC’s new “package” to planters, which took effect on November 8, includes milling incentives and other benefits per ton cane delivered direct to the mill from Victorias, Manapla and Cadiz area, an incentive that is way above the usual trucking packages offered by other sugar mills, Valderrama said.
Normally the trucking package is determined based on the distance of the farm to the mill, he said.
The VMC is currently giving a higher trucking package because last year it only offered P250 per ton, he added.
Valderrama said that VMC keeps increasing its trucking packages after noting a decline in its current tonnage versus the year-ago level.
The mill was averaging 84,180.90 weekly gross tonnage during crop year 2020-21 and now down to only 71,260.4 tons per week with lower sugar recovered per ton of cane (lkg/tc) compared to other mills, sources said.
As a result, VMC increased the total trucking allowance package from P250 per ton last year to P300 week-ending Aug. 29, 2021 to Sept. 19, 2021; hiked it again to P400 week-ending Sept. 26, 2021 to Oct. 3, 2021; P450 for week-ending Oct. 10, 2021 and currently at P550 just to assure itself of steady cane supply, the press release said.
The VMC management, in a statement in response, said entering CY 2021-22, part of the company’s strategies is to ensure capacity utilization of its sugar segment through a stronger and more relevant incentive scheme to attract more sugar planters to supply their sugarcane to the company.
The trucking allowance is only one aspect of this scheme that management has undertaken after a thorough scrutiny and understanding of the needs of the farmers during this time, where oil and fertilizer prices continue to rise, it said.
Fertilizer cost has increased dramatically by three-folds compared to the last crop year. From around P800/bag, it is as high as P2,500/bag now. On top of that, you have the world oil price doubling as well from $40/bbl to $80/bbl, VMC added.
Another initiative that the company has engaged in for sustainability is the production of liquid fertilizer which it offers its nearby and willing partner-farmers for free, it said.
VMC remains committed to respond to the needs of its planters and the sugar industry, it added.*