MANILA, Philippines - Once described as a sunset industry, the sugar industry has shown its resilience, surmounting one challenge after another. This time around, the sector faces yet another big challenge as tariff rates within the region are set to go down dramatically in line with the Asean Free Trade Agreement (AFTA).
“We have to prepare the country, sugarcane farmers and everyone,” said Agriculture Secretary Proceso Alcala during a recent meeting with industry stakeholders.
The goal is to make the country’s sugar industry globally competitive in time for the implementation of AFTA.
Under the agreement, the tariff on imported sugar from competing ASEAN countries will be reduced from the current 38 percent to 28 percent next year, then to 18 percent in 2013. The rate will go down further to 10 percent in 2014 and finally to five percent in 2015.
The keys, according to the stakeholders, are mechanization and the growing of sugarcane for ethanol production.
To get to where the industry wants to be, the Sugar Regulatory Administration (SRA) under the leadership of Administrator Ma. Regina Bautista-Martin has drawn up a roadmap to serve as a guide in the identification and implementation of appropriate programs and interventions to prepare the industry.
There are three target outputs:
The first is to expand the area planted to sugarcane from 400,000 hectares to 470,000 hectares.
Second is to increase farm productivity from 63 tons cane per hectare (TC/H) to 75 TC/H.
The third is to raise sugar yield from 1.90 bags per ton cane to 2.1 bags per ton cane.
The banner program under the Sugarcane Industry Roadmap is block farming or the operational consolidation of small farms to take advantage of plantation scale production and achieve higher productivity.
Statistics show that small farms, which comprise 90 percent of the country’s sugarcane area, produce an average of 50 TC/H compared to big and well-managed farms which produce more than 100 TC/H.
Bautista-Martin said small farms of 10 hectares or less will be consolidated into “block farms” with an aggregate area of no less than 30-50 hectares. This will be done through various innovative schemes like lease, joint venture, partnership, sharing and other arrangements. Ownership of each small farm is still maintained and respected, with landowners getting a share of the profits. Professional managers will oversee the operations of block farms which will be given priority in the delivery of services by various agencies.
Private investors will assist the block farms, either by direct investments and/or management or service delivery.
Bautista-Martin said foreign sources may be tapped to fund the acquisition of farm machineries, irrigation systems and other facilities.
The SRA chief said another intervention is the expansion of areas for bioethanol production. She said the help of the Department of Agrarian Reform will be sought to organize agrarian reform beneficiaries with idle lands that will be developed into sugarcane farms.
In line with this, Bautista said there is a need to conduct an inventory of all sugarcane farms in the country, a very critical tool in arriving at sugar production estimates to form the basis of SRA’s regulatory policies.
The baseline will also serve as guide for the sugar agency in implementing programs appropriate for a particular sugar milling district.
Farm mechanization is likewise very important, Bautista-Martin said, adding that sugarcane is a crop that needs deep plowing. This brings up the need for machineries like tractors and implements necessary to improve and optimize farm productivity.
According to Bautista-Martin, a proposal for ACEF funding will be worked out.
There is also a need to improve and expand the coverage of irrigation facilities. SRA will be submitting a proposal for the Bureau of Soils and Water Management to fund irrigation systems for the sugarcane milling districts.
Finally, there is a need to establish new farm-to-mill roads and rehabilitate existing ones which need repairs every milling season since these are dirt roads that are not passable during rainy days. Rehabilitation is usually funded by sugar mills in partnership with the mill district development committees. Bautista-Martin said they hope to get some funding from the Department of Agriculture.
If everything goes according to plan, the sugarcane industry will become globally competitive before the end of the current administration’s term.