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Bacolod City, Philippines Monday, April 22, 2013
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3 sugar industry challenges
must be addressed, Lito says

The approval of use of the so-called “magic sugar”, the attacks against ethanol as alternative fuel, and land reform are among the major challenges confronting the Philippine sugar industry today.

This was stressed Saturday by former Negros Occidental Gov. Rafael Coscolluela, who keynoted the VICMICO Planters Association and the Victorias-Manapla-Cadiz Multi-Purpose Cooperative members’ assembly, on behalf of Senator Miguel “Migz” Zubiri.

He said the three concerns must be addressed with concerted action so as not to further compound the state of the sugar industry when zero-tariff on imports takes effect by 2015.

Coscolluela, now national president of the Confederation of Sugar Producers Association, spoke at the Bacolod Pavilion before more than 600 assembly participants.

The memorandum of the Bureau of Food and Drugs permitting the use of “magic sugar” as an alternative constitutes a big threat to the sugar industry, Coscolluela, who has also served as administrator of the Sugar Regulatory Administration, said.

Since the “magic sugar” uses sodium cyclamate, there could also be serious health issues related to its improper use, he said.

This is something that the sugar industry needs to address. If the BFAD insists in authorizing its use, what the stakeholders can do is to push for more conspicuous labeling, he said.

“I, therefore, challenge the planters, 90 percent of whom are small growers and ARBs to also inform their families about the threat posed by ‘magic sugar’ and campaign against it,” Coscolluela said.

The second serious threat to the industry, is the well-planned attacks against the use of ethanol that again threaten the biofuels program, Coscolluela said.

“Such action might discourage investors who are coming in,” he warned.

Coscolluela explained that the attack against ethanol is centered on its alleged “harmful effects” on gasoline engines, as an alternative fuel.

“This is baseless, as proven by technical experts and, therefore, should be dismissed. We can always stay on the 5 percent blend if it’s not good,” the former SRA chief said.

Efforts to discredit ethanol appear deliberate, and industry experts believe they came from the suppliers of MBTE, an additive used for unleaded gasoline to increase octane as they are expected to lose P2 billion annually if the country’s biofuels program takes off, he said.

He called on the Department of Energy to buckle down to work and address this concern because ethanol is a better alternative for MBTE.

The challenge is for both the sugar and ethanol industries to come together and inform the public about the benefits of the biofuels program and the use of ethanol, he said.

The sugar players must also take an active role in this advocacy because an expanded ethanol program will consequently redound to the benefit of the farmers and their families, he added.

To permanently solve the situation, the sugar industry must move toward a three-legged diversification and integration program involving sugar, fuel which ethanol and power for energy co-generation, he said.

On the third pressing problem, which is land reform, Coscolluela pointed out that since the profile of the industry has changed, with small growers and ARBs now comprising 90 percent, “we have to make sure that they are properly supported.

“We have to enlist the support of people who understand the industry; people who are not just sympathetic to sugar but to agriculture in general. We have to be able to reach them in the executive branch, legislature and other agencies,” he said.

He cited Zubiri and former Senators Jun Magsaysay and Richard Gordon as among those who have a track record to help the agriculture sector and have the willingness to listen to the concerns of sugar industry stakeholders and understand the same.

The presence of the three in the Senate is vital as there is a need to advance legislations that will provide support to the agriculture sector in general and the sugar industry in particular, he added.

Asked by one cooperative member how the association can help raise sugar prices, Coscolluela replied, “You will have to increase your productivity so that even if you don’t get government subsidy you will still survive against the competitor”.

He cited that in the United States, the US Department of Agriculture, in an effort to provide subsidy to its farmers when prices are down, is talking about a sugar buy-out scheme. Under the proposal, the US government will purchase American sugar from producers at a price above the forfeiture rate, which is higher.

The sugar supply accumulated under the buy-out strategy will then be converted to ethanol. “That is the extent of subsidy they are extending to their sugar producers,” he said.

Here in the Philippines, the opposite is true. When sugar prices are up, the government complains because of its bias to consumers, he said.

“But when prices go down, the government does not ask what it needs to do to support sugar farmers,” he added.*

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