It takes time

There is something good these days for the sugar industry in that reports say the bill of Rep. Alfredo Benitez has been approved by the House Ways and Means committee. Benitez is optimistic that the next committee, Appropriation, will fast-track its approval. If things move as hoped for, then the bill can be out of the House by end of this year.

That means that the entire House which will debate and approve it will also be fast although this bill, I think was not certified urgent by the President.

The House might really approve it by December but there is still the Senate to contend with and we have yet to hear when the Upper House will complete its work. We also do not know yet at what stage this bill is. All we have heard so far are pledges of support, and that includes Senate President Juan Ponce Enrile whose son who is running for the Senate will reap a good harvest of votes from the sugar industry.

While we hope for speedy approval we should not overly fly into frenzy of joy but keep our feet on the ground. It takes time and a lot more to do and go.

Of course, Benitez is getting a lot of excellent publicity and praises to the extent that some say he is positioning as a leader of the sugar industry and a king-maker in the province’s political arena.

However, if nothing substantive happens as the clock ticks he can also be in hot water for keeping our hopes too high. That is the price leaders pay.

Anyway, he needs support from all sectors in the province regardless of their misgivings and “fear” that Benitez might wrest the leadership in the industry.

Granting that the House Bill 6113 or the Sugar Industry Development Act of 2012 (it would be 2013) passed by next year and the President approves it posthaste, the most difficult task begins and that can take a lot of time to impact in the industry.

Let’s take one idea that arose from discussions in the industry – the cane purchase system. I described this system last year when I wrote about the Thai sugar industry.

What is this system about? The sugar mill will buy the cane and as owner of the cane, it will also own the sugar and by-products like bagasse and molasses. The planters will thus become producers of raw material (canes) and will have no sugar.

Victorias Milling Company announced last August 8 that it is developing a plan to adopt the cane purchase system on a voluntary program. This means that planters have the option to sell their cane to the mill or stay with the present system.

This is not new, however. The entry of American sugar investments in 1910 used this system and developed it. I will not trace the history of how this system was adopted and then discarded. The situation then and now are different, but there are similarities that the industry can learn from.

Suffice to say that the planters of VMC shouted “Absolutely Not!”

I will not discuss the merits or demerits of this scheme for the moment except that this will have some relations with the proposed Benitez bill.

One of the provisions of HB 6113 is the establishment of economic zones that would make the mill as the center or at least the fulcrum of this zone. One of the ideas in this zone is co-generation of energy or electricity.

The co-generation concept means the utilization of bagasse, the waste fiber from the cane. If the planters sell their canes then they will lose ownership of bagasse which is a source of fuel by the mill and the co-generation plan. This is lost income of the planters.

Sure, it does not follow that the bill will be affected by this local situation. The point simply is that the bill provides for ideas that maybe considered new under the present circumstance but hardly revolutionary.

Like the cane purchase system, a lot of changes must take place in the industry to attain its purposes – low production to allow Philippine sugar to compete at least in the domestic market.

This opposition in VMC only indicates that the ideas under HB 6113, once presented in concrete form can meet resistance from the industry that is set on its traditions and culture.

Changing the industry culture, like the planters as owners of the cane, the sugar and the by-products and control of their trading will take a lot of time, longer than getting the bill approved.

This is the greater challenge. It requires a paradigm shift in the way the planters think and industry operates. The bill can pass but minds can sit still.*

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