Press Releases

Liberalization, be careful. SRA abolition, yes in its current form.

August 17th, 2022

As I warned before, we have to be circumspect about the liberalization of the sugar sector. The sugar production sector is among the most labor intensive sectors in the agri sector, needing 1.4 workers per hectare on average compared to 0.6 for rice, and 0.7 for the whole sector. A sudden influx will definitely hurt farmers — especially in this time of high fertilizer, fuel, and labor prices.

The benefits to liberalization aren’t so clear cut in the direction of national welfare either. A NEDA report once indicated that it would hurt planters and millers by 57 percent of profits while benefiting consumers with 65 percent additional welfare (https://neda.gov.ph/an-assessment-of-reform-directions-for-the-ph-sugar-industry/https://neda.gov.ph/an-assessment-of-reform-directions-for-the-ph-sugar-industry/)

In its current form, the SRA must change or be abolished. It has not been very effective in its role of local industry development. Low utilization rates of SIDA and TRAIN Law funds have hounded that agency. It is certainly a failed agency, judging by the outcomes of its mandates.

A more technical panel headed by DA, with the planters, millers, industrial users, consumer groups, and BSP (for inflation targeting) and NEDA (for economic impact) being represented might be a better, more deliberate way of deciding whether we need to import sugar and how much.

I would suggest that sugar industry programs be streamlined within the DA instead, as is consistent with the overall direction of PBBM to streamline agricultural support.

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