Villar pushes funding for sugar sector

BACOLOD CITY, Philippines – Sen. Cynthia Villar  and four other senators are pushing for the passage of a consolidated bill that seeks to allocate P300 million per year for the Sugar Cane Industry Development Fund ( SCIDF) to boost the industry.

The provision on SCIDF is contained in the bill titled “Strengthening the Sugarcane Industry”.

The first public hearing  on the bill was held last Nov. 14, at the Sugar Regulatory Administration (SRA) office in Bacolod.

Villar presided during the hearing as she is  the chairperson of both the Senate Committee on Agriculture and Food and Committee on Government Corporations and Public Enterprises.

The hearing was in line with the bills on sugar filed by five senators: SB 233 by Sen. Nancy Binay, SB 592 by Senators Francis Escudero and Villar, SB 824 by Sen. Antonio Trillanes IV, and SB 1229 by Sen. Joseph Victor Ejercito.

The sugar industry is perceived to be a P70-billion industry, Villar said.

A total of 360,000 hectares of land in the country are planted to sugar, employing about 600,000 workers, an SRA report said.

But the sugar industry is faced with a looming crisis starting 2015 when the tariff walls on imported sugar collapse.

Under the ASEAN Free Trade Area (AFTA)-Common Effective Preferential Treatment, tariffs on imported sugar will be lowered as tariff rates on sugar from competing ASEAN countries will be gradually reduced.

The tariff on ASEAN sugar entering the country dropped from 38 percent in 2011, to 28 percent in 2012, 18 percent this 2013, 10 percent by 2014, and five percent by 2015.

“We are here to assess the real situation of the sugar industry and to find means for its profitability,” Villar said.

Aside from giving a much-needed boost to the sugar industry, and creating the SCIDF, Villar said the proposed bill also seeks to transfer to the Sugar Regulatory Board the power to nominate all members of the Philippine Sugar Corp. (Philsucor).

The proposed P300-million annual fund is expected to provide adequate funding for PhilSucor to enable it to pursue and carry out its mandate and objectives under its charter.

The fund would be taken from the VAT imposed on refined sugar, she said.

Among those who attended the public hearing were Negros Occidental Gov. Alfredo Maranon Jr., Bacolod Rep. Evelio Leonardia, Bacolod Mayor Monico Puentevella, Agriculture Secretary Proceso Alcala, Jay Layug, chief of staff of Sen. Binay; and sugar leaders led by SRA administrator Ma. Regina Bautista-Martin, PhilSucor president Renato Salvatierra,  Enrique Rojas, president of the National Federation of Sugarcane Planters (NFSP), Rafael Coscolluela, president of the Confederation of Sugar Producers Association (CONFED), Francisco Varua, president of the Philippine Sugar Millers Association, Manuel Lamata, president of the United Sugar Producers Federation, as well as millers and workers organizations.

Demands

Sugar leaders asked Villar to make sure the national government would help the sugar industry become competitive in the world market.

Lamata asked the national government to level the playing field for sugar-producing countries come 2015.

“We can compete with anybody in the world as long as the government will help level the playing field. I also asked you to revisit the tariff system,” he said.

Rojas told Villar that for the sugar industry to compete with other sugar producing countries such as Thailand, the government should develop an irrigation system.

He cited that there are seven big rivers in Negros Occidental that could be tapped to provide enough water supply to sugarcane farms.

Negros  produces 67 percent of the total sugar production in the country, thus it needs to prioritize the development of an irrigation system complimented by farm-to-market roads, cheap prices of fertilizers, additional and latest inputs on sugar production, upgrade of sugar mills, diversifiy power sources  as these could  help improve production efficiency and  lower production costs, he said.

Coscolluela, a former SRA chief and governor of Negros Occidental, noted that the sugar industry is ‘running on its own steam’ as it subsidizes the research and development, anti-smuggling drive and even finances the SRA without  help from the government.

In Thailand, its government taxes  local sugar by as much as seven percent, but the tax collected is plowed back to the farmers through the cane and sugar fund purposely to improve their competitiveness, Coscolluela said.

Here in the Philippines, the former SRA head said, instead of the government helping the sugar industry, it even extracts more from the beleaguered industry by slapping  a 12 percent VAT on processed sugar.

Other sugar groups’ representatives also spoke on the needs of the sugar industry.

Villar assured her office would collate all the suggestions, feedbacks, and insights and these would be taken into consideration in the crafting of the proposed Senate bill.

She vowed to help the sugar industry become competitive.

Villar intends to hold two or three more public hearings to extensively discuss the salient points of the bill, and to form a technical working group to draft the bill before the year ends.

Rep. Alfredo Benitez (Negros Occidental, 3rd District)  re-filed a similar bill in the Lower House last May. It is entitled the Sugarcane Industry Development Act.