Sugar Road Map

I finally got a copy of a more detailed paper called Sugarcane Industry Road Map (2011-2116) which the Sugar Regulatory Administration had prepared and its planning office shared with me as I requested. I mentioned this road map in December last year but I got only the statistics but not the plans – objectives and mechanism for attaining these objectives.

The document, according to SRA was “formulated as a guide in the identification and implementation of appropriate programs and interventions to prepare the industry for year 2015 and beyond when tariff of imported sugar will be reduced to 5 percent.”

Appropriately the Road Map is focused on the slogan, “Gearing Up Initiatives for AFTA 2015 & Beyond.”

Although the six-page document speaks in general terms, nevertheless we have a glimpse of what the SRA and I presume the leadership in the sugar industry, the national government agencies and the general public are expected to do. I also presume that the map will eventually become a travel guide to get the traveler on site.

The targets are modest as they are mainly for increases in sugarcane areas, farm productivity and per unit yield. A closer study of the strategies, however indicate that increases in these three areas are not limited as the Road Map points to programs that go beyond simply widening the area and improving the extraction of more sugar from the cane.

I’ll comment on the strategies later. Offhand, the objectives are well done because they are practical, meaning they are measurable and therefore it is easy to find out whether the objectives have been attained year after year and with that, granting an open mind, the map can be modified to suit the circumstances of the moment.

The proposals prepared by the committee of sugar producers and which I touched briefly before in this column, have three main areas of concern - productivity, marketing and economic zones. Their targets are broader than that of SRA but I think this difference is due to their diverse interests and functions. The producers are concerned with profitability while the SRA as a government agency see the situation as regulatory and circumscribed by time and freedom of maneuver.

Compared thus the SRA road map focuses on one of the concerns of the producers – quantity of sugar supply or production. SRA wants to expand the acreage planted to sugar, improve the capability of extraction and the quantity of sugar per unit either in the mill or in the farm in effect comes in tandem with the producers concern.

Marketing is not an SRA concern, not part of its mandate but the producers have proposals where I think SRA will have a tremendous capability to assist. In some ways the SRA should come in to the sphere of marketing. The producers have their proposals but short of SRA going the way of the defunct National Sugar Trading Corporation or Nasutra which was a government monopoly on the trading of sugar.

Nasutra was a creature of martial law and the child of the circumstances of the time when other sugar producing nations were also into monopoly. In fact, the post 1980 international trade agreements were reactions against state monopoly which was the trend at the time. When Nasutra was created there were 19 countries with sugar trading monopolies. But let us leave that to history.

On the other hand, the economic zones that the producers proposed are achievable and here the SRA will have a tremendous role to play but the producers must come up with specifics on how the government, SRA specifically can intervene in a good way. One area, for instance is to adopt a special policy governing these kind of zones and not under the general umbrella of existing policies. The sugar economic zones will have peculiar circumstances.

The convergence of the SRA road map and that of the producers is on production. The appended projection in the SRA road map, however, showed that SRA is already behind its target. This road map must have been prepared in 2009 before the incumbent SRA Administrator Gina Martin took over because it has a projection of 2,399,116 metric tons and by this crop year 2011-2012 the planned production is 2,242,130. We know that actual national production was lower than projected, especially in the last crop year.

Under this road map, SRA planned that by next crop year the country will produce 2,467,288 and by the end of this map national production shall have reached 3,281,520 metric tons.

The reality so far is that SRA’s projections have not come about. We are stuck with a production level just beyond the 2 million mark. The SRA projects a production of 2,242,130 this crop year. We will know if we are on the right and attainable production target by end of the milling season.*

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