Lost P1.5B sugar fund

IT IS almost unthinkable but the unthinkable happened – the loss of P1.5-billion of the Sugar Development Fund that was mandated in the Sugar Industry Development Act of 2015. The law provided for an annual P2 billion for several programs and projects specifically for the sugar industry. That was landmark legislation because for the first time the industry was given a significant allocation of the national budget precisely, among several other intents, to make the industry competitive in the international or just even in the local market. 

Senator Cynthia Villar, one of the darlings of the industry, blamed the Sugar Regulatory Administration for “under-spending” as if the industry does not need that much money to survive and prosper. The Department of Budget and Management was left without a choice but to reduce the SRA budget to one fourth because anyway, a little logic will tell us, it does not need that large amount of money while the rest of the country is crying out for funds.

The law specifies the programs and projects to be funded. Let me just cite two important projects that are important to directly respond to the present need of the industry – competitiveness. There are long-term programs, like scholarships but the immediate need of the industry is to cushion the impact of the low cost imported sugar.

These two programs are block farming and mechanization. The two are interrelated, one helps the other. However mechanization has wider implications.

The block farm system was initiated by SRA to help the agrarian reform beneficiaries. The farms of the ARBs are small and therefore are at a disadvantage. As I wrote several times, sugarcane is a plantation crop, meaning it requires large tracts of lands to be truly productive at lower cost. Since the crop takes a year to harvest, compared to rice at 120 days or corn at shorter term, the sugarcane planter needs to have a good capital base to sustain them during the period of cane gestation.

A cooperative system adapted to the peculiar situation of the ARBs, can help here. It will take long to digresson this subject; the point is simply that the SIDA fund can be a source of financial assistance, not necessarily with direct release of money but in other forms.

This is where mechanization comes in. A small farm cannot afford the cost of mechanized farming that a plantation crop needs, like deep plowing and better furrowing, fast harvesting and transporting. A machine can do these things at least cost in terms of time and labor, as well as better yield.

How much of the billions that were annually available to SRA since 2016 been used for these? SRA should tell us because now with only P500 million to spend, it will even have to reduce the scholarship program unless it focuses on this which is the easiest and least complex programs requiring little imagination and competence.

As with the ARBs, the larger farms, mostly family corporations, need to mechanize. There are already several of these machines – tractors and harvesters – that need financial support to encourage others to adopt mechanization. Cooperatives can be organized to provide only services to reduce the need for farmers to buy and maintain the expensive machines.

Losing P1.5 billion in the SIDA fund is no small matter. Why was SRA unable to maximize its use? This seems to be, to repeat, unthinkable because if there is any need today for the industry to prevent its collapse, it is funding to make the industry competitive, ironically the primal objective of the SIDA funds. Instead, SRA and the industry labored to stop the inevitable import liberalization when it could have focused on the maximum utilization of the fund to stave off the need for importation. What sort of negligence should we classify SRA for this failure?

 A report says SRA will lobby for the return of the lost P1.5 billion. Under the circumstances, even if all those that the SRA- supported Tatak Kalamay candidates were elected, the SRA will have to show proof it is competent to handle the billions. More so, other departments and agencies are salivating to get those billions.

So far, except for the block farm and scholarship program, initiated by the previous SRA administration, what has the present one to show? Is SRA bereft of competence and leadership?