Philippines : Sugar sector pushes floor price via program
The sugar industry is urging the government to introduce a buying program that sets a floor price of ₱2,300 per 50-kg bag to protect farmers and millers from falling prices. Officials say the proposal could stabilize the market and ensure profitability, but it would require significant government funding and further policy review.
The sugar industry is calling on the government to put in place a buying program that will set a floor price as a way of preventing the locally produced sweetener from nosediving.
Confederation of Sugar Producers Associations (Confed), through former Sugar Regulatory Administration (SRA) Administrator Rafael Coscolluela, made this proposal during a previous public hearing where he said that the government program should purchase a 50-kilo bag at a minimum of P2,300.
In response, SRA Administrator Pablo Luis Azcona said a mandated flood price would ensure that planters will remain profitable throughout the sugar crop year.
Azcona, however, raised a caveat that implementing a buying program would entail a “big budget” as sugar traded in the milling season reached P2.65 billion on a weekly basis. Thus, the proposed program requires further study.
“If we come up with a mechanism to establish a (floor) price, it will make the lives of the farmers a lot easier because the price—no matter how high or low it will be—if it’s pre-set, we can all adjust our operations to be profitable at that price.”
Azcona noted that rich sugar-producing countries hold a tripartite meeting to establish a fixed price for the sweetener the entire year. This will be agreed upon by millers, farmers, and the government.
Sugar stakeholders recently met with the SRA board to discuss possible solutions to the problems that beset the industry.
The group urged the government to implement changes to the government buying program from 2 years ago, where the former will purchase a certain portion of the farmer’s and miller’s produce at a predetermined price.
At that time, President Marcos approved the P5-billion budget requested by Agriculture Secretary Francisco Tiu Laurel Jr. and Azcona.
The meeting also focused on suggestions for establishing a government-mandated floor price for the farmer’s and miller’s sugar.
The stakeholders urged the government to control the entry of artificial sweeteners and sugar substitutes, which dampen demand for locally produced cane sugar.
The Department of Agriculture (DA) chief said raising tariffs on artificial sweeteners is “on the table” to boost demand for domestic sugar.
Last month, lawmakers in the House of Representatives are reviewing potential amendments to existing laws and policies to address the sharp drop in mill gate prices of locally produced sugar and its effects on farmers and industry workers.
Quezon Rep. Mark Enverga, chairman of the House Committee on Agriculture, said current mill gate prices of P2,000 to P2,100 per 50-kilogram bag are below the estimated production cost of P2,500, prompting a legislative review.
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Source : Business Mirror
