Everybody’s got their poison, mine is sugar – Derrick Rose
This is not the first time sugar prices reached an almost all time low. But what is not highlighted are the plight of the lowly and marginalized sector of the industry who suffer most of the brunt this infamous phenomenon brought. The small sugarcane producers and the agrarian reform beneficiaries whose hand-to-mouth existence largely depend on the sugar industry are expected to get worse as sugar prices continue to slump. They remain powerless and sidelined in the whole dynamics of the industry, particularly the price determination of the province’s main agricultural product.
There are almost 15,000 agrarian reform beneficiaries according to the agrarian reform department and more than 80% of them depend on sugar production as their livelihood. Low sugar prices creates multiple undesirable impacts as their production heavily rely on loans while many of them are already hostage to leasebacks making them mere workers of their own land a heartbreaking reality and those who survive the leasebacks are left with no choice but to repay exorbitant interest rates. They continue to produce sugarcane but only for the benefit of abusive loan sharks and even some private banks.
USUAL SUSPECTS
The declining prices is mainly blamed on the strong and increased harvest globally, especially the large sugar-producing countries in the world, Brazil, Australia, and Thailand to name a few. For its part, Brazil’s “bumper harvest” is characterized by exceptional high sugarcane yield and high sugar output that caused sugar prices to go down, coupled by currency fluctuation effects – stronger dollar against domestic currencies of sugar producing countries and smuggling evident in some Asian countries, allegedly including the Philippines.
Also sugar market experts attribute the low prices to speculative trading spilled over sentiments – a psychological attack. These are the usual suspects but exceptionally it is Brazil’s “bumper harvest” considered as the biggest factor, as asserted by some sectors in the industry.
DOMESTIC DEMISE
After almost 40 years of implementation of the agrarian reform program, the ARB’s remain poor and helpless trapped in indebtedness calling for quality and adequate government support services. These make them vulnerable to oppressive loan sharks and private lending firms, making it impossible for them to recover ownership of land and a productive sugarcane yield year in and year out.
The current milling season shows no sign of price increase or stability. There are now unified calls to local government officials which is imperative and an immediate intervention by concerned national government agencies such as the Sugar Regulatory Administration and the Department of Agriculture. Major producers of the main agricultural product may have the absorbability especially those sugar planters with 50 hectares. On the other hand, the small sugarcane producers and the agrarian reform beneficiaries are hand-to-mouth existence and can only depend on the bidding prices set by the sugar mills. An intervention is called to at least stabilize prices and lessen impact to the agriculture sector and the economy. This is to ensure accessibility and availability of sugar especially those engaged in MSMEs whose existence are directly and largely dependent on the industry.
CUTTHROAT APPROACH
This country’s economy has suffered more than it can absorb. This created havoc among the production phase of the supply chain that slashes a deep socio-economic impact among small producers and ARBs, their resilience put to the test. As farmers, preserving the sector is a natural circumstance despite absorbing the worst impact of the industry’s challenges. Profit or no profit, they continue to produce sugarcane because of their nature as farmers, hoping against hope for the recovery of the industry to uplift their socio-economic status.
The price decline literally squeezed the sector with the thinnest profit margin making them less resilient. As we look forward, more challenges and threats beset the industry – smuggling resulting in oversupply and low prices, climate change impacts – infestation, high fertilizer prices and limited government support services, and subsidies. These are the perennial challenges that remain unaddressed for the longest time.
SUNSET INDUSTRY
The demise is the result of a combination of the alleged manipulated oversupply caused by unauthorized import or smuggling, high prices of production input, and climate change impacts. This year, Brazil’s “bumper harvest” is attributed to be the major factor for the low sugar prices. For the Philippines, the unified call is the nth time government intervention that seems to be inadequate if not illusive as the plight of the small sugarcane producers and ARBs continue to worsen.
Government’s inaction is a dodge towards this declining and disappearing industry. Negros is a monocrop economy no more.*
