When sugar doesn't taste sweet for consumers and small farmers

·Contributor
·9 min read
A Filipino worker carries freshly cut sugar cane at a plantation in Tuy town at Batangas city, south of Manila April 26, 2006.
The sugar crisis that erupted in the past couple of months came as no surprise to the players in the sugar industry. But the ones at the receiving ends of this fiasco’s effects are those at the grassroots themselves: the farm owners, farmers, and consumers themselves. REUTERS/Romeo Ranoco

Here is the greatest irony of the sugar fiasco in the Philippines: As the Philippines’ local sugar production decreases over the years, the number of problems and issues around the industry increases.

The sugar crisis that erupted in the past couple of months came as no surprise to the players in the sugar industry. They acknowledge that it is the result of a decades-long dwindling of sugar production in the Philippines; Sugar Regulatory Administration (SRA) data showed that the supply of raw sugar as of August 31, 2022 (2,073,167 metric tons) and refined sugar (1,171,558 MT) is heaps lower than the supply on the same date last year (2,397,781 MT and 1,195,213 MT). This year's number is lower by 14% and 2%, respectively. Looking even farther back, this downward trend has been going on for decades already.

This decline was due to a multitude of reasons, as laid down by Roland dela Cruz, national president of the National Congress of Unions in the Sugar Industry in the Philippines (Nacusip), to Yahoo Philippines.

"Sugar production is a plantation crop production – the larger the tract of land, the higher the yield. So when the government’s agrarian reform program was implemented, it cut off large tracts of sugar lands from hundreds of hectares down to as low as just one hectare," said Dela Cruz. "We are not even talking yet about the lack of support from the government to our farmers' beneficiaries."

Dela Cruz was referring to Republic Act No. 6657, or the law that institutes a comprehensive agrarian reform program "to promote social justice and industrialization." The program, in theory, aims to ensure more equitable distribution and ownership of land by providing landless farmers and farmworkers with the opportunity to improve the quality of their lives through greater productivity of agricultural lands.

"If the real intention of the agrarian reform law is to give lands to the landless, they should also provide the necessary support system, including funding, training, and access to equipment, among others – something that the current system does not really provide especially to individual farmers and farm owners."Roland Dela Cruz, NACUSIP

He noted that "if the real intention of the agrarian reform law is to give lands to the landless, they should also provide the necessary support system, including funding, training, and access to equipment, among others – something that the current system does not really provide especially to individual farmers and farm owners." Without this support, the benefits of the agrarian reform program cannot be felt by those at the grassroots.

Other main roots of the sugar crisis are the reports of anomalies, graft, and corruption involving SRA's Sugar Order No. 4 which mandated the importation of 300,000 tons of sugar – a move which Malacañang said was illegal – and the mismanagement of funds specified by the Republic Act No. 10659, otherwise known as the Sugarcane Industry Development Act (SIDA) of 2015, the law that provides for the government's provision of adequate support to the sugar industry stakeholders.

"The SIDA budget was P2 billion, but because of the inefficiency of the SRA in implementing the program, 2 billion pesos became P500 million only," noted dela Cruz. "This is really unfortunate because the stakeholders are reliant on that SIDA budget, and yet it was reduced drastically."

Organizations like Nacusip have long been calling out the SRA to properly implement the SIDA, only to fall on deaf ears. "SRA has been very callous and deaf to the cries of the small stakeholders – they only listen to corporate stakeholders," said dela Cruz.

‘Price manipulation, not sugar shortage, is the real crisis’

A Filipino land reform beneficiary Romaldo Hoyohoy plows the field with the use of water buffalo at the disputed farmland planted with rice and sugar in Santa Catalina town in Negros Oriental province in central Philippines on November 13, 2008 after the Department of Agrarian Reform installed the 30 landless farmers at the 61 hectare property, ending an 11-year legal battle against the powerful political clan of Teves family who owns vast tract of agricultural land in this sugar producing province. (Photo: ROMEO GACAD/AFP via Getty Images)
While many reports focus on “sugar shortage,” as commonly said by some players in the sugar industry, for Roland Dela Cruz of Nacusip, the bigger problem is actually price manipulation. Looking at mill-gate prices and the standard retail price the wide gap is unmissable. (Photo: ROMEO GACAD/AFP via Getty Images)

Dela Cruz said that all these issues hounding the SRA and the SIDA led not to sugar shortage, as is reported by many news outlets, but to price manipulation.

"For us, there is no such thing as sugar shortage," said dela Cruz. Last month, it can be recalled that joint operatives from the Bureau of Customs, Armed Forces of the Philippines, Department of Trade & Industry (DTI), Department of Agriculture, and the SRA seized various imported sugar from warehouses in Pampanga and Bulacan; they seized more or less 44,000 sacks of imported sugar with an estimated value of P220 million.

"That was a lot of sugar, and not to mention that we still see sugar supply in the market, right? All these are contrary to the claims of some people in the sugar industry that there is a shortage," noted dela Cruz. "Price manipulation is happening – that is the real issue here."

During the regular, weekly biddings in most if not all sugar mills, dela Cruz shared that the usual value of a 50-kilogram sack of sugar is P3,000 to P3,200, which would make a kilogram of sugar worth more or less P60 to P64. "So why would a kilogram of sugar be sold for more than P100 in the market? Where does the balance or the difference go? Why is it that the mill-gate price is around P60 to P64 only but the standard retail price is more than 100 pesos?"

Dela Cruz called out the DTI for this price manipulation. "During the early parts of the Senate hearings on this issue, I was surprised that DTI was not there. Shouldn't this be under their purview?" he noted. "When they saw that the prices are increasing, they should have managed to implement a price control already because, obviously, there is a huge gap between the mill-gate price and the SRP."

Consumers, businesses cry foul over sugar fiasco

As in many economic crises like the sugar crisis, the effects are more severely felt by the consumers themselves.

Linda Dimayuga, a sari-sari store owner located near the public market in Batangas City, said that she stopped selling sugar because it costs so much more now than before. “First of all, it is already way beyond what I usually peg every time I buy sugar from my supplier. If I continue buying sugar to sell in my store, I may have to lessen buying other supplies,” said Dimayuga. “So what I did is I stopped buying sugar instead of compromising my other products. After all, even my usual buyers have stopped buying sugar from me.”

“It is so hard to budget because the cost of sugar has gone so high than it was two years ago. I know that a price hike is normal because even other products’ prices have gone up, but the increase in the price of sugar is on another level.”Tonet Castillo, vendor

Meanwhile, Tonet Castillo, who sells palamig or cold drinks in front of a public school also in Batangas City, said that a huge part of her daily income from selling cold drinks to students and teachers of the school goes to buying sugar alone. “It is so hard to budget because the cost of sugar has gone so high than it was two years ago. I know that a price hike is normal because even other products’ prices have gone up, but the increase in the price of sugar is on another level.”

Even household brands that heavily use sugar in their products have expressed the effects of this crisis on their business; Coca-Cola Philippines, for one, announced that it had temporarily suspended its operations in some of its plants due to the lack of supply of bottler's grade sugar, as a result of the ongoing sugar crisis.

In its statement obtained by Yahoo Philippines, Coca-Cola Beverages Philippines, Inc. said, "We are doing everything we can to minimize supply distribution and the impact of supply shortage [on] our bottling operations. We are also continuing to work with the government and the broader sugar industry sector to arrive at a sustainable solution for the benefit of small retailers who also rely on [product] availability for their livelihoods."

Priority areas that need urgent attention

BACSIL NORTH, PHILIPPINES:  Village chief Manuel demonstrates how sugar cane juice is extracted from the crop using backyard mills in Bacsil north, Ilocos borte 29 September 2005.  The village of Bacsil North is the primary sugar cane growing area in the northern Philippines. The cane juice is extracted by backyard mills like the one in the background, and then fermented to produce vinegar and a local wine called basi.  (Photo: JOEL NITO/AFP via Getty Images)
The government should focus on re-strategizing with the SRA, updating qualifications and requirements of agrarian reform programs, and simplifying the processes of government transactions with external suppliers, said Roland Dela Cruz of Nacusip. (Photo : JOEL NITO/AFP via Getty Images)

If dela Cruz were to advise the government, the first order of business, he said, should be for the SRA to regain the trust of stakeholders and the consumers and make sure that the Sugar Order No. 4 fiasco will not happen again. It is also important that the SIDA budget will be implemented and distributed properly to more than 800,000 farmers and laborers who are dependent on the sugar industry.

SRA should also relax the documentary requirements for the applicants to several agrarian reform programs. Dela Cruz noted that in the current application process, every applicant needs to submit documents "more than a ream of bond paper" – this may be hard, especially for small farmers who cannot afford to secure all these hefty requirements.

"[Sugar production] should be service-oriented, not profit-oriented."Roland Dela Cruz, NACUSIP

Further, several agrarian reform programs may also need to be updated already to make them more accessible to small farmers. One of the programs that need some updating, according to dela Cruz, is SRA's Block Farm Project, which requires farmers to have a minimum of 30 hectares of contiguous sugar land to be qualified.

"For many small farmers, having 30 hectares of land is not easy, and the SRA should know that. This is why the number of farmers who avail the Block Farm Project has been consistently low," stressed dela Cruz. "We are calling on the SRA to look into the possibility of reducing the requirement to 15 hectares or even lower – a more realistic figure for the ideal beneficiaries of the Block Farm Project."

Lastly, the government should also start doing its international trade "government to government."

"Remove all the middlemen – it should be the Philippine government itself already who should transact with, for example, the government of Thailand, in purchasing fertilizers. Once the Philippine government receives the fertilizers, then it would be them who would sell the fertilizers directly to the farmers," advised dela Cruz. "It should be service-oriented, not profit-oriented."

With this orientation changed, the sugar industry may be just as sweet again as it was before, he said.

Juju Z. Baluyot is a Manila-based writer who writes in-depth special reports, news features, and opinion-editorial pieces for a wide range of publications. He covers cultures, media, and gender.

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