Marañon seeks national subsidy for sugar industry

BACOLOD CITY , Philippines   â€” Negros Occidental Gov. Alfredo Marañon Jr. the other day lamented that the national government has no subsidy to the sugar industry, with only two years left before it eventually plunged into crisis.

The Philippine sugar industry is bracing for 2015 when tariffs on imported sugar are expected to go lower.

Under the ASEAN Free Trade Area (AFTA)-Common Effective Preferential Treatment, 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, to 18 percent last year, then 10 percent by next year, and finally 5 percent only by 2015.

Marañon said he was not however worried about the looming crisis, if the country only adopt an "efficient" method of producing sugar and "bring down the cost" of production. He said problems besetting the industry have not been properly addressed because "the sugar industry is fragmented," as shown by many federations. "The sugar industry should be united. We should have one voice," the governor said.

Senator Cynthia Villar, chairman of the Senate committee on agriculture and food, told the Sugar Regulatory Administration, in a meeting last year in this city, she and four other senators were pushing for the passage of a bill seeking to allocate P300 million per year for the Sugar Cane Industry Development Fund to boost the industry.

The sugar industry is perceived to be a P70-billion industry, employing about 600,000 workers, Villar said. A total of 360,000 hectares of land in the country are planted with sugar, with Negros Occidental producing 67 percent of the total sugar production in the country.

Marañon said other countries, like Thailand, have been giving subsidy to their sugar industry, not in the form of cash assistance, but by other means such as bringing down the costs of fertilizer, and providing free irrigation to farms. "This ensures the survival of the sugar industry, which is faced with stiff competitions in the world market," he said.

In the Philippines, we have "the highest cost of cheap labor," said the governor, explaining that having many sugar workers contributes to high cost of production, and therefore high cost of sugar. "If the cost of sugar in the Philippines is high, it faces a stiff competition in the market as sugar from other countries is considerably lower, owing to their cheaper labor costs," said Marañon.

Australia has the cheapest cost of sugar production because it uses mechanization. For instance, its 50 hectares of sugar has only three farm workers, said Marañon. But while mechanization is the way to go in ensuring lower cost of production, but it cannot be done here because it will displace many workers, as a result. (FREEMAN)