A call to productivity

The local sugar industry thrives on the peaceful co-existence of major industry pillars, the farming, processing, trading, R & D and the regulatory sectors. With the highest degree of organization despite varied concerns and interests, these sectors are unanimously united to protect the local sugar industry, a multi-billion business empire with a GDP contribution of the same economic proportion.

With some policy change evolving in our midst, the protection of the local sugar  industry is seemingly put to a test. But more than merely raising their concerns on the proposed sugar import liberalization on the apprehension that such will consign the local industry to its sunset status, the farming sector, which performance principally determines  the annual volume of sugar production, should not purely depend on or solely delegate to  the government the  protection of the local industry through initiation of their own  productivity measures on realization that any policy change  is a consequence of  their low farming output.

If only the farming sector  can produce more and efficiently, the sugarcane inputs for sugar mills to process the  desired volume of sugar at par with or even greater than the demand level, these talks of importation, much less of import liberalization shall become things of the past. With all the government interventions amidst a fast changing technological age, what is preventing the producers to annually come up with 2.4 to 2.5 million metric tons of sugar enough to sustain local demand? By experience, these volumes, or even higher than these, were previously attained, making the Philippines a net sugar exporter.

With a balance level of supply and demand to manage, it would only take the interplay of internal supply and demand factors and none of external ones, as impacts of dumped sugar prices,  to dictate domestic sugar prices, hopefully still profitable to producers, but more importantly, fair to consumers.

But transcendental and paramount to all considerations are the profitability of local producers and the welfare of the consumers. Production should be optimized and not curtailed below the level of sufficiency for purposes of sustaining higher domestic prices for bigger profit margins but at the expense of the consumers in stiff competition with very limited domestic supply.

Sooner or later, the influx of lowly priced sugar due importation, regulated or liberalized, will dilute the domestic prices, worse at a level lower than the producers’ production costs. Should this happen, the more is the possibility that the industry shall be consigned to its sunset status. Thus, our  local producers  are called upon to produce more and produce more efficiently. – Luis Marajas, Sugar Regulatory Administration, North Avenue, Diliman, QC