Local sugar farmers wary of ASEAN full integration

The domestic sugar industry has warned of the possible influx of sugar from Thailand once the full economic integration of ASEAN comes into full effect in less than three years from now.

Felixberto Monasterio, executive director of Sugar Masterpolan Foundation, raised this alarm as preparations to cushion the impact of the ASEAN Free Trade Area (AFTA) are being hampered by distortions in the domestic market situation.

“Thailand is expected to be the major source of sugar come the full implementation of AFTA. They will be coming in with a big advantage as they are subsidized by the Thai government,” Monasterio said.

Supplementary payments to Thai farmers practically assure profits at the farms. Friendly financial assistance packages from government banks are almost on a ‘pay when able basis, he pointed out.

“The sugar industry stakeholders are hoping that the government will chip in into the efforts in meeting the challenges come the full implementation of AFTA in 2015,” Monasterio said.

Monasterio said that infrastructure support such as farm to mill roads and technical assistance especially with regards to the changing weather patterns would be most welcome.

Support for the research and development of farm machineries such as cane harvesters and loaders would impact on the profitability of the farms. Difficult as it may seem, he said, the industry is moving forward via a very strong partnership between the Sugar Regulatory Administration (SRA) and the private sector.

The stakeholders were well aware of the changing global market conditions especially with the advent of free trade agreements.

According to Monasterio, there are some 60,000 farmers on about 420,000 hectares planted to sugarcane all over the country but small farms of less than 10 hectares comprise 88 percent of total sugarcane farms.

The industry has blamed the fragmented sugarcane development to the implementation of the Comprehensive Agrarian Reform Program (CARP), which has only resulted in inefficient sugar production in the country.

There are also 26 mills and refineries being established as part of the safety nets to mitigate the influx of sugar from the ASEAN economic integration by 2015.

Monasterio said that government should act now to ensure the sugar industry, which contributes about P70 billion to the country’s GDP and P2 billion to the national treasury in the form of VAT.

In addition, he said, sugarcane is also a primary source of fuel ethanol, a potent replacement for the expensive oil imports. Sugar factories are being eyed to contribute to the energy self sufficiency program through the use of biomass / waste from the milling process.

The industry has expressed hopes that government should further extend rescheduling and/or restructuring of loans of the industrial sector to suit the needs of the processors in times of difficulties. So far, the government has been intervening in domestic pricing to ensure that the industry is able to meet its production goals.

Overall, however, the sugar industry of the country has been on a “sariling sikap mode”. (BCM)