SRA reaction

An email reacting to my column of July 26 was forwarded to me (July 30). The long letter was signed by Ma. Regina B. Martin, Sugar Regulatory Administration Administrator. The letter started on a wrong foot. It cited my column to be titled “Tariff bound” when the column is titled “Quota bound”. The published one was corrected and more polished.

Since the letter is quite lengthy, let me quote several portions of the emailed one. By and large she wanted to clarify the contents of my column.

She claims that “We do not have an export-import program. We have not imported any sugar for the domestic market since year 2011.”

Well, I never said SRA has an export-import program or that it was importing each year. However, SRA did import as she admits but not “since year 2011.” This admission confirms that SRA imported earlier. I recall there was uproar when the SRA exported to the US and imported from somewhere and that was under her watch. That is public knowledge.

I am glad she revealed an important piece of information. She said “we have produced more than 2.4 million metric tons last year and a slightly higher volume this year. Comparatively, our domestic demand has been languishing at just about 2.0 to 2.1 million metric tons in the last three years. At 24-25 kilos per capita sugar consumption for the Philippines, and with 88 million Filipinos in the country (because 12 million are OFWs abroad [others say its 2 million]), our domestic demand for CY 2013-14 will reach about 2.1 to 2.2 million metric tons. Given these basic figures, you can readily see that we have a surplus.”

For now we have a surplus but production as SRA admits has been “languishing” for the last three years. While there are only 88 million Filipinos left behind to consume our sugar consider that this population is growing every minute and that means an additional consumption 24-25 kilos every minute.

The government says our population annually grows at an average rate of just below 2 percent. This means that if sugar production remains stagnant, the “surplus” that SRA is proud about will be wiped out in due time.

What are the chances of our production to persistently grow at even 2 percent annually? Since our production is at a standstill, what surplus will we have, say in five years, if the same circumstances prevail?

Consider also that the acreage of lands devoted to sugar is declining in favor of other uses. How many hectares of sugar land are annually converted to roads, housing subdivisions and other crops? SRA's statistics gives us the answer.

While we may have a “surplus” this crop year, that surplus will be wiped out once the expected two million more consumers are added next year. I am not counting the possibility of a natural calamity and the reduction of sugar land acreage. The SRA statistics in fact shows how precarious our supply is.

Administrator Martin further clarifies that “We have been a surplus producer of sugar for the past years, particularly in the recent three years when we exported no less than 150,000 metric tons to the world, on top of our US quota.” Our US quota is 142,000 MT.”

Sounds wonderful but if our production is 2.2 million tons, our US quota is 142,000 and the world market is 150,000 metric tons, how much safe margin do we have? The recent spike in domestic sugar price tells the true story. SRA is playing a dangerous game. But, as in the past, there is always the import option even if SRA has no import-export program.

Can the SRA increase the output of the country considering the factors that now negate such production hike?

As SRA admits, our sugar farms are practically penned on disadvantageous circumstances that the House bill filed by Rep. Alfredo Benitez proposes to address. But as SRA also knows even if or when the Benitez bill becomes law, the proposals will take time to produce desirable results.

Although the Benitez bill is a step in the right direction, the historical fact is that there is little new in it. Most of his proposals had been tried before and they failed not because they were not good but because the industry lacks the leadership and the government tends to prioritize other crops.

Perhaps the leaders in the industry, starting with the SRA can make the difference. But can they unite? Even now they speak in diverse tongue.

Let's continue tomorrow.*

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