Zero-tariff year: Sugar barons brace for 2015

BACOLOD CITY, Philippines — Sugar industry leaders and stakeholders must start preparing for the challenges ahead when zero-tariff for foreign sugar producers will be implemented in 2015.

Negros Occidental Governor Alfredo Marañon Jr. issued this statement recently, similar to what he told to sugar planters during the Philsutech Convention in Cebu City last year.

"It is high time to address this problem because we can't avoid this anymore," said the governor, citing sugar as a major industry in Negros Occidental, which supplies about 60 percent of the country's sugar needs.

"I call on our sugar industry leaders to prepare and I am very hopeful that we will be able to surpass this," he said.

The industry should capitalize on good sugar prices to modernize and plan how to bring down production costs to be competitive with other sugar-producing countries in the Asian region. "While we still have the resources, let us work on these challenges," Marañon said.

The implementation of zero-tariff in 2015 is expected to affect the sugar industry in the country when sugar-producing countries are allowed to enter the Philippine market with no taxes.

Marañon has been pushing for the mechanization of the operations at sugar farms and mills, saying that the present operations have high cost of production but with cheap labor. He also called for the establishment of a research program that will study on the modernization of sugar operations.

"Other countries have a very good research program for the sugar industry. We should make our operations efficient but cheap," he said.

In Australia, sugar farming is done in a bigger scale. A sugar farm there has to be 50 hectares or wider, so it can produce profitably, Marañon said.

In the Philippines, many sugar farms are smaller, which is caused by the implementation of the Comprehensive Agrarian Reform Program (CARP), he said.

The problem with giving a piece of land to agrarian reform beneficiaries (ARBs) is that most of them sell or lease their lands defeating the purpose of CARP and is counterproductive to farming, he said.

He recalled that when he made a Voluntary Offer to Sell (VOS) his land in Sagay, one of his conditions was not to divide the land among ARBs. If it is owned by a group of ARBs, no one can sell his share and the production is at a large scale, he said.