Blaming the SRA

By: Modesto P. Sa-onoy

Only Senator Cynthia Villar had the courage to speak up and pin the blame on the present unhappy state of the Philippine sugar industry on where it rightly belongs – the Sugar Regulatory Administration. All other political and economic leaders had gone into rhetoric, rationalization and promises but skipped the main actor in the deterioration in the industry.

The SRA is the government agency that controls the industry, primarily the body tasked in ensuring its viability. But as the situation now shows the SRA had not come up to expectation. On the other hand, criticisms of its handling of the industry, especially in the sensitive matter of allocation of the sugar for various markets are plenty. Suspicions had been rife of SRA collaboration with sugar traders and industrial users to the detriment of the producers. Some voices are now calling for its abolition or reformulation.

News that came out on November 20 said that Senator Villar blamed the SRA for “giving sugar import permits to the traders instead of the food processors who are the biggest consumers of sugar.” She also asked, “Why give the import permits to the traders? That would result in a cartel and the high price of sugar. It’s the wrong move for the SRA. They are supposed to protect the sugar industry”.

Two things the senator who heads the Senate committee on agriculture said that hit a sensitive issue in the industry and the subject of constant complaints – importation and favoritism for traders.

Despite these perennial complaints, the SRA has been unwilling, for years, to change its ways. The only reason, as insinuated by industry leaders is corruption. Indeed, there must be money in the power to allocate sugar supply otherwise, why keep the system despite the complaints?

Maybe SRA can tell the public because not only the allocation for the industrial users but even the importation itself that have been considered inimical to the interests of the producers. Of course, we know that many planters and their associations are also traders so that the SRA has the backing within the industry.

She added that imported sugar, especially from Thailand, is cheaper because their cost of production is less than about 50 percent compared to our production cost so our local farmers cannot compete. This is widely known and in fact, is being used by traders and industrial users to lobby for liberalization.

The government, Villar said, has not yet decided on the sugar import liberalization and that economic leaders are “still talking”. The President is aware of the situation and the present controlled (albeit not so tight) importation is merely temporary relief. This insinuates that liberalization in sugar importation is a matter of time, a lease before the guillotine blade comes down,

Twenty-two senators had passed a resolution asking the government not to pursue the planned liberalization of the sugar industry to protect the welfare of sugar farmers and industry workers in more than 20 provinces in the country.

But a resolution is only an expression of the “sense of the Senate” and without legal binding effect on the government agencies. Surely these agencies are also afraid of the Senators but the resolution can be disregarded at any time when contingencies arise like a sharp rise in prices on the shelves.

Villar did not pursue her thrust but at least she placed the blame on the SRA for the underutilization of the P2-billion annual Sugar Industry Development Fund which was formulated to precisely obviate the possibility of a liberalized importation of sugar.

She revealed that under the Year 2020 budget, the Department of Budget and Management allocated only P500 million for SIDA Fund as the sugar industry failed to fully utilize the P2 billion allocation for the past several years.

Clearly it is not the lack of funds that prevented SRA from improving the industry but the failure of SRA to develop programs and mechanisms to make the industry competitive.

This failure shows that either the SRA is lead by incompetents or officials without any intent to protect the industry. For what reason, we cannot surmise but as they say action, or lack of it, speaks better than words and there are plenty of adjectives to define that.

Despite the sharp rebuke from Senator Villar, the SRA top guys have maintained an omerta. I will discuss this further next week.