eastwind journals 126


By Bernie Lopez
Permission is granted to re-publish with credits and notification.
Disclaimer – the views in this article are those of the author’s alone.


Author’s Note.
This article was sourced from interviews of planters, millers, workers, plus sugar industry and SRA documents. The SRA head Gina Martin was abroad and not available for interview at the time I was in Negros.


A new Sugar Bill coming up for final Senate reading is being questioned by sugar industry stakeholders. The bill’s goal is to protect planters, millers, and 600,000 workers, and strengthen the sugar industry against negative effects of the AFTA zero tariff on sugar imports to be implemented in 2015. Thailand, from which we import sugar, may dump excess sugar here and bring down local prices to the detriment of our Sugar Industry. Protestors say the Sugar Regulatory Administration (SRA) is trying to get a free ride, inserting provisions to expand its regulatory powers, which is detrimental to the industry. So how can the bill fulfill its goal to strengthen the industry?


The bill was authored by SRA and passed on to Congressman Jolly Benitez for docketing. SRA has an unholy alliance with the heads of big planter-miller federations, and key big time traders. Let us call them the ‘Sugar Consortium’ or just ‘Consortium’. The bill was crafted by the Consortium.


One major issue in the bill is – who will manage the P800 million or so fund coming from VAT collections? SRA is drooling over the fund, but stakeholders want to have a transparent and multi-sectoral board to manage the fund to insure its proper use for everyone’s benefit, not the SRA and the Consortium. They say the VAT fund in the hands of SRA will service only itself and the Consortium, finance the projects of favored partners, which were in the past detrimental to planters-millers-workers. Protestors succeeded in having provisions in the bill favoring SRA removed, but some planters and millers say there are still many toxic provisions left.


Another major issue is the expansion of SRA regulatory powers which have strangled free market forces. SRA’s random and confiscatory allocations of sugar exports are considered arbitrary, and without basis. Some planters-millers are even for the total abolition of exports. SRA refuses to provide any reliable surveys on domestic consumption. Inaccurate manipulated estimates of the local market are used as an excuse to allocate exports. If we are exporting to the US just to respect an agreement, they say they are doing the same. Mexico dumps its excess sugar to the US. Many say the US no longer really needs our sugar. Perhaps it is about time we bilaterally abolish the US quota, or make it optional.


The mounting protests from all sectors, from planters-millers-workers, other government agencies, and lawmakers are not without reason. The notoriety of the SRA is well known. It has reversed allocated sugar exports for Alpha (US market) and Delta (global market), back to Beta (domestic market) many times, as in crop years covering 2011 to 2014 without giving the ‘differential’ back to the planters and millers. The price of export sugar averaged P750 per 59-kilo bag, while that of domestic market averaged P1,550, yielding a differential of a juicy P700 to P850 per bag. SRA quietly reversed the lowered priced export sugar, converted it to higher-priced domestic sugar, and the ‘differential’ vanished into thin air. Protestors were asking if SRA divided the pie with their trader partners in the Consortium. In crop year 2013-14, they did it again, but this time, realizing that more producers became aware of their shenanigans, the Consortium decided to give back a little, P400 of the P700 differential. Protests were ignored and explanations only raised more questions.


Another ambition of the SRA through the Sugar Bill is to take over the authority over all commodities sourced from cane, such as ethanol (under the DOE), and alcohol (under the DTI). SRA is also eyeing a say over VAT exemptions (under the BIR-BOC). They want to take over the BOC function of giving VAT-free certifications to traders. All these point to ‘regulatory capture’, not protection of the industry. Planters-millers say all these give SRA the power to manipulate and control funds or receive remuneration for favors. It seems that the Sugar Bill is promoting SRA’s regulatory adventures.


Realizing this SRA notoriety, letters and position papers were given to senators asking for the change of the words “SugarCane Industry” to “Sugar Industry”, so as not to imply in any way that the regulations over ethanol and alcohol are being captured by SRA. Protestors in fact want all mention of ‘bio–ethanol’, ‘alcohol’, ‘downstream’, ‘diversification’ stricken off the bill, which imply regulatory coverage for SRA.


While SRA and the Consortium managed to mislead many in both Houses, some senators noted the inconsistencies in SRA’s position. In reaction, the Consortium sent feelers that these senators were simply ‘delaying’ the promulgation of the bill. One senator proposed a safety clause that, as long as the law does not curtail free market competition, and does not unduly expand SRS regulatory powers, there is no problem. SRA refused to accept this provision for no valid reason, revealing its malicious motive in the Sugar Bill.


It is bad enough that the government fails to support the sugar industry. But it goes beyond that. THEY MILK THE INDUSTRY FOR THEMSELVES IN AN UNHOLY ALLIANCE WITH A CONSORTIUM. This is why we can never compete with Thailand which is a sugar exporter, whose government gives a sugar subsidy. In our case, it is the reverse, our sugar industry gives a ‘subsidy’ to the Consortium. When will we ever have a government for the people, not against the people? Greed is always the core issue in governance. Bernie Lopez PLEASE SEND YOUR REACTIONS.
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