19 Aug 2022 – Sugar shortage a self-fulfilling prophecy

Published by rudy Date posted on August 21, 2022

LABOR MATTERS
By Ruben D. Torres
August 19, 2022

FOR over a week now, the problem of a looming sugar shortage in the country and the suggested remedy of importing sugar have occupied the attention of all media outlets.

Earlier this year, there had been concerns about the country’s looming sugar shortage. This was allegedly due to a combination of factors that resulted in a much-reduced sugar production output.

Notably, there has been a substantial reduction in hectarage devoted to the cultivation of this vital sweetener.

Last week, the Sugar Regulatory Administration (SRA) issued Sugar Order 4, which allowed the importation of 300,000 metric tons (MT) of sugar to help alleviate the shortage of this sweetener being used in households and by manufacturers of soft drinks and other products. This order was taken out the next day. The reason for the withdrawal is that President Ferdinand Marcos Jr. had not approved it nor was he consulted about it.

The president of the National Congress of Unions in the Sugar Industry of the Philippines (Nacusip), Roland de la Cruz, outlined to this writer the causes of the perennial shortage of sugar in the country. Nacusip is the biggest federation of sugar workers in the Philippines. He said that 70 percent of sugar production in the Philippines is now done by small sugar farmers. Big sugar haciendas no longer dominate the industry because the hacienda lands have been subdivided into small plots and distributed to agrarian reform beneficiaries.

Sugar production has been adversely affected by the high and increasing cost of fertilizer, weed killers and insecticides, and last year the industry was severely affected by Typhoons “Odette” and “Agaton.”

The sugar industry is now experiencing a shortage of available workers as young workers with at least a secondary education now opt to work in non-agricultural enterprises. De la Cruz said that the small sugar planters are the worst affected by this shortage of available labor. During the harvest season, which usually starts in September, the available workforce prefers to work with bigger farms first. This results in the drying up of the canes that small growers produce with the concomitant loss of yield.

De la Cruz lauds President Marcos for his decision to hold the importation of sugar at this time since the harvest and milling of sugar cane usually start in September. He believes that there is still enough sugar in the country. He, however, agrees with the plan to import premium refined sugar, or what is called “bottler’s grade sugar,” which very few refineries in the country try to produce.

Nacusip further asserts that the importation of sugar will eventually cause further difficulties for the sugar workers and planters. Imported sugar will definitely lower the price of domestically produced sugar. This is ironic, but it is the reality. The cost of producing sugar in our country is much higher than in other countries. This is attributable to the diminishing fertility of land thus requiring increasing inputs of fertilizers and other chemicals, coupled with the antiquated methods of growing sugar cane, milling and refining.

Lobby for sugar importation bared
Whether there is a real shortage of sugar or a threat thereof, the effect of all these reports in the media about an anticipated short supply has now resulted in the increase of the retail price of sugar in the market even as the commodity can still be seen on the shelves of retail outlets.

Is the shortage of this diabetes-causing sweetener merely the realization of a “self-fulfilling prophecy?” Talk about a sugar shortage even as supply is still enough, and the shortage will sooner or later become a reality. Talk about an impending bank run even as it may not have any factual basis will result in people lining up to withdraw their deposits. This phenomenon is evident in human behavior and is an illustration of the phenomenon known as “self-fulfilling prophecy.”

Whenever a shortage of a basic commodity is reported, customers, retailers and bulk traders immediately react. Customers will start buying more of the commodity as supply may not last or prices will increase beyond their reach. Traders will start hoarding the commodity in anticipation of increased demand which will jack up the price and ipso facto profits.

The President gave assurances recently that he would take necessary measures to ensure enough supply of sugar, especially for companies that are engaged in food and beverage production. This announcement from the Palace shows that there is a short supply of premium refined sugar.

Govt runs after sugar hoarders, smugglers
This announcement of the President may not be enough to arrest the skyrocketing price of sugar. There is still a need for the Department of Trade to monitor the selling price of sugar and for the SRA to assure the people that there would be no shortage of the commodity as appropriate measures, including importation, are now being considered seriously by the government. Additionally, by next month, the milling season will start.

There should also be an investigation of whether there is corruption in the aborted importation of sugar as Senate President Miguel Zubiri alleges. He suspects a P600-million kickback scheme in the importation of 300,000 MT of sugar.

The government must also determine whether there is an actual shortage of sugar or whether the present situation is being manipulated by traders who are hoarding their stored sugar in order to artificially increase the price.

Group to DTI: Inspect sugar warehouses
In 1995, there was a rice shortage. President Fidel Ramos’ first move was to meet with the country’s big rice traders. He called them to a meeting in Malacañang and sternly told them to immediately release whatever available stock they still had with the threat that if they refuse he would order the military and the police to force open their warehouses and if there is any indication of hoarding, the rice will be confiscated. The president, however, told them that the government would pay for the rice confiscated.

This meeting resulted in a very significant easing of the shortage of rice in Metro Manila as traders immediately released to the market their stored rice in their bodegas and warehouses.

The fault of the administrator and the members of the Sugar Regulatory Board was not in just raising concern over a possible sugar shortage nor in issuing Sugar Order 4, which authorized the importation of 300,000 MT of the commodity. The fault lies in their complete disregard for the President himself. It should be noted that President Marcos has temporarily assumed the position of secretary of Agriculture and therefore is concurrently the chairman of the Sugar Regulatory Administration.

President Marcos has made agriculture the number one priority of his administration. He envisions food self-sufficiency for the country. Those in the Department of Agriculture and the private sector engaged in the growing of important agricultural products should follow the President’s lead.

For this procedural and yet substantive lapse in judgment of the top officials of the Sugar Regulatory Administration, it is but proper that they resign, as in fact they already have.

Let this be a lesson in governance. The president must not be kept in the dark on matters that affect the national interest.

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