Captive

If we were consumers with any freedom of choice, we would certainly buy our sugar from everywhere else and not from domestic producers. Sugar in our wet markets cost P100 per kilo. The commodity may be had from Thailand at P20.

But we do not have freedom of choice. We are trapped in an enclosed domestic market and forced to buy what is too expensive to produce. We are all prisoners of a failed local industry.

This week, President Marcos ordered the immediate importation of over 64,000 tons of sugar to “stabilize” domestic prices. The Sugar Regulatory Administration (SRA) appears reluctant to do that, claiming we have sufficient supply of the vital commodity.

This agency is the poster boy of regulatory capture. It seems its only role is to ensure that planters and millers recoup their costs – no matter how exorbitant these might be and how inefficient this sector has become.

Domestic prices for sugar injures more than household consumers. They harm our processed food industry. Commodities that use sugar have an inflation rate of 38 percent. That pulls up our overall inflation rate.

Because of high domestic sugar prices, industrial users are forced to accept losses. Our processed food sector cannot be competitive. That kills our capacity to export and our economy’s ability to create jobs.

But protection of our sugar industry remains the paramount policy even as it creates all sorts of distortion in the domestic economy. As we saw in the controversy a few months before that cost the former executive secretary his job, planters and millers wield great clout in policymaking.

That controversy involved an order authorizing the importation of 300,000 tons of sugar. At that time, the estimated shortfall in supply was 350,000 tons. The order, therefore, does not fully close the gap.

But it will reduce profitability for planters and millers, even as they enjoy quotas for importation. They strongly opposed the order, claiming that a bountiful harvest was underway to supply the market. That harvest came and went. Our consumers are still shelling out P100 for a kilo of sugar.

The President’s order for the immediate importation of 64,000 tons will not bring down prices for the commodity. If purchase orders are placed today, the earliest we get the supply is February next year – assuming there is enough supply in the global market to sell to us.

The 64,000 tons of sugar, I am told, will not even suffice to meet the needs of our industrial users. Furthermore, the shortfall in sugar supply has now ballooned to 500,000 tons. Only the SRA fails to see this gap.

Planters, millers and sugar workers are vociferously opposing importation. All of them are conflicted. High domestic prices suit them.

These groups claim the “solution” to the high sugar price regime are subsidies for the sugar industry. What that means is that the cost for inefficiently producing sugar will be passed from the direct consumer to the taxpayer. Most of us are both consumers and taxpayers. We will pay for the persistence of this zombie industry just the same.

A few years ago, rice prices drove domestic inflation because of high production costs and inefficient farm methods – and despite all the subsidies this sector enjoyed. The Duterte administration took the bold step of liberalizing rice trading. That cured the problem of high rice prices and all the market distortions these caused.

We should start thinking along these lines for the sugar industry. We cannot forever hold our consumers captive to a dead enterprise. It is time to move on.

Statesman

Some, observed Winston Churchill, are born to greatness. Others somehow achieve it. Still others have greatness thrust to them.

The latter applies to Volodomyr Zelensky. Ukraine is fortunate to have this statesman at the helm during this most difficult time.

Exactly 80 years ago, with Hitler’s army overrunning most of Europe and his own country under siege, Winston Churchill traveled to Washington DC to enlist American participation in a great war to defend democracy and defeat fascism. This week, Zelensky was welcomed in Washington and assured support however long it took to defeat Russian aggression.

The Ukrainian president was an unlikely hero. Although schooled in history and law, he was better known as a television actor. A comedian, in fact. One of the more memorable roles he played was president of Ukraine, a country demoralized by its own political class and threatened by Russian power.

On the basis of that fictional role, he sought the actual presidency of his beleaguered country. He won the post with overwhelming support. Ukrainian voters thought he could not be any worse than the string of clowns and plunderers who ruled the country.

When Russia invaded Ukraine last February, Zelensky proved equal to the challenge of leading his people in defense of independence and democracy. His articulateness and his courage equipped him to play a real-life role with aplomb.

Shortly before he traveled to Washington, an influential magazine named Zelensky Man of the Year. None would contest that choice.

Days after the Russian army swarmed Ukraine’s borders, western powers offered to evacuate Zelensky so that he might lead a government-in-exile. The Ukrainian leader sharply replied that he did not need a ride, he needed ammunition.

Since the invasion, Zelensky rallied his people effectively. He bravely visited the frontlines to inspire his troops. He deployed diplomacy to rally the world against the brutal occupation of his country.

Every step of the way, he demonstrated what leadership was all about.