Will the sugar woes ever end?

By: Modesto P. Sa-onoy

IT IS A dictum in the Philippine sugar industry that the price and destiny of the industry be like a roller coaster ride. Sometimes it is up but mostly, the pessimists say, it is down. No matter, there were always the crop loans that the banks were ready to give until political pressures intervened and the crop loan releases depended on the planter’s political leanings.

But they are past. The industry today, or for the last 20 years, had been placed in a state of uncertainty, albeit ignored, because of the international agreements that opened the market to free trade. We asked for this kind of agreement for many of our products, but it also lifted protections for the most vulnerable of all the sectors of our economy – the agricultural sector.

It is in line with these international trade agreements that we also opened our markets to agricultural products of signatory nations. The agreement, particularly the ASEAN Free Trade Agreement, cautioned that every signatory country must prepare for the impact of open or liberalized trading. It has been over 30 years since AFTA and the other nations believe enough time has been given to each.

But the Philippines did not prepare for that eventuality that was supposed to take full force by the beginning of the 21st century. Our government and our agricultural producers, like the rice and sugar industries, relied on “extensions” and we finally ran out of this option.

It is perhaps a futile exercise to get stuck on what we could have done. One of my favorite passages is a quote from an American poet, John Greenleaf Whittier who wrote, “For all sad words of tongue and pen, The saddest are these, ‘It might have been’.”

In our language, “kuntani” is indeed a sad word because we could have done what ought to be done but didn’t.

But the question now is: what ought to be done at this late hour? Is it a waste of time and effort to harp into the negligence of the past? How true it is that those who ignore the lessons of history are bound to repeat the mistakes.

Sugar industry leaders ever since its summit of wealth and influence since the 1920s had relied on the government for protection and expansion; government leaders pampered them for their collective voting power. Each embraced the other.

But the realities of the world’s economy called for an end to protectionism and adoption of free trade. The Philippines agreed because it needed markets for its expanding economy. The Philippine sugar industry initially supported free trade as it opened other markets for its products but also that same scenario prompted other countries to produce sugar, not just for local consumption but for export.

The signs of the times failed to create in the sugar industry the imperative of competing against the new and traditional producers – Thailand, Brazil, Australia, India and emerging African nations. The industry continued to live under the siren song that the government will always bail it out because of its clout.

Well, now we know that the government has other darling industries – exporters of finished products of which sugar is not. It is a raw material that industrial users want to be cheap so that they can compete with the world.

The industry also failed to anticipate the reality of expanding land use for housing and infrastructures and its aging methods of production that make its sugar less-competitive in the local and world markets.

The changes adopted by the government to accommodate socialistic ideologies helped greatly in keeping local production below competitive prices. Small landownership has been proven as an anti-thesis to the economy of scale. But the industry lost in this ideological battle because of historic blunders that the socialists squeezed of every drop in their propaganda campaign against the industry. Politicians wanting the votes of ideologues and sugar consumers can no longer deliver because to show partisanship in favor the industry is a death wish.

The May election is a watershed of this phenomenon. The senators who got the industry leaders support under the slogan “Tatak Kalamay” have been silent while the industry agonizes under the new and recycled threats of low mill site prices, liberal importation and use of other but cheaper sweeteners.

We’ll deal more on this subject in succeeding columns.