Cane purchase

The sugarcane planters in this country, represented by their federations and associations took out an ad to declare their collective rejection of the planned cane purchase system that the sugar mills intend to implement. The advertisement, including that of the planters of Victorias Milling Company did not say when this system will be implemented but since the plan was announced just as the milling season starts (officially September 1), I presume this is now effective.

The manifesto starts where the VMC planters began and reiterated the same results of the cane purchase scheme.

Indeed all what the planters said will be the inevitable consequences of this scheme but one wonders whether this system has been approved by the Sugar Regulatory Administration that will certainly mean radical changes in the industry including SRA’ operation.

The system is voluntary which means that planters can opt to reject this and adhere to the sharing system that had been in place and widely used in the industry since 1920s.

The planters are thus left to decide. If they reject this cane purchase system then the mill cannot do otherwise. It behooves then for the associations and the federations to convince their members to stay with the sharing system and for the mill to engage in an intense information drive to get the planters to opt for this scheme.

So far we have not heard from the mill on how this scheme is implemented and whether this system is favorable to whom. Surely the mill adopted this scheme because it is profitable to it.

On the other hand, if the planters are so disadvantaged then the mill would be killing its own raw material source.

The mill must have calculated the profit for itself and for the planters, that both will benefit from this system. It is not possible for the industry to prepare for the 2015 low tariff on imported sugar much less to survive if the planters lose their shirts.

The scheme must have been planned in such a way that the planters would likewise benefit from the scheme. But how?

We do not know because the mills have kept their mouth shut. However, since the scheme has caused a strong outcry from the planters we can assume the planters who were informed of the new scheme believe they are disadvantaged. Nobody quarrels with something beneficial to one’s self.

The idea is not new. In fact, in a conference called by then Gov. Lito Coscolluela in 1994, ironically to prepare for the day the tariff rate drops to five, cane purchase was among the proposed means to reduce the cost of sugar production, both beneficial to the planters and to the millers.

The documents produced in that Joint Legislative-Executive Consultative Caravan on Tariff and Trade on the General Agreement on Tariff and Trade (GATT) which was the springboard of the ASEAN agreement has cane purchase as among the solutions to our lack of competitiveness in the international sugar market. Nothing happened to the list of proposals that includes the plans of Cong. Alfredo Benitez in his Sugar Bill.

Benitez’ ideas are just a repeat of what had been proposed before and which are gathering dusts in shelves somewhere, maybe in SRA.

This is the reason I have plenty of misgivings about the Benitez bill which is being paraded as the solution to the problems we are facing for the inevitable descent of the ASEAN low tariff.

It might do well for the industry leaders to revisit the documents of 1992 which the Philippine Sugar Millers Associations produced.

The millers are therefore just implementing the cane purchase scheme, their proposed measure at the time (1992-1994) but which the planters probably missed but not the millers.

There were talks about this scheme but nothing happened until now that the millers have finally decided that under the circumstances the time is ripe to shift to this system.

Our readers will recall that I wrote about cane purchase in the narrative about the Thailand sugar industry where cane purchase is generally adopted. I cannot compare it with the present VMC scheme because the miller has not explained this publicly.

It might do well for the planters to explain the details of the VMC scheme because there are several variations in this scheme that is also adopted by other sugar producing nations.

The consequences that the planters’ in their ads cited are entirely true and will come about. These too need to be clear because they are at best general in impact. The details are more horrifying not just for the industry but for other sectors.

The planters must do more than just “strongly and vehemently object” to this scheme. That position shows its own weakness and go nowhere with the public.*

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