Sweet, sour, saccharine and sloppy

By Dean dela Paz

These words define the mess that the highest officials at the Department of Agriculture (DA) seem to have stepped on when the public finally realized that the person officials sacrificed and had thrown under the bus, accused, shamed, and was even described as ‘’evil’’ by media sycophants may have actually been the type of competent and credible technocrat needed at the department. Simply look at the cast of characters getting first billing in the tragi-comedic Zarzuela unfolding around what started as a rice crisis, followed by sugar, and now even white onions and salt. Central casting could not have chosen a more incredible Larry, Moe, and Curly team to manage the sugar shortage. Sloppy is an understatement.

Only one had the necessary alphabet soup after his name. Outside those basking in the limelight empowered by their camaraderie behind the official microphones, only the shamed scientist with nothing to gain, no political image to protect and no hidden agenda other than the welfare of the public was a true agricultural technocrat. What the DA did not need were poseurs brandishing police powers, political solutions, pretenses, and palliatives to solve a complex problem totally beyond their comprehension.

The worsening crisis at the DA, the creeping food crisis, and the series of fiascos inflicted on the most vulnerable among us make for excellent arguments for appointing competent, experienced, and honest technocrats critical to portfolios such as education, energy, social welfare, and agriculture.

Uneducated stock knowledge and melodrama will not do. Note the 90.9 education poverty index. Add a sector threatened by crony capitalism, a dole-out department absent intelligent systems and protocols and finally, imagine ironic food shortages in a country whose largest sector is agriculture yet one that cannot even feed itself.

Let us focus on the sugar crisis some blame on nature, others on a Mafia of hoarders. Let us start where officials insist there is no shortage yet decided to import at least 150,000 metric tons to fill in a supply gap. There is no local shortage but there is an eleventh-hour emergency reclassification to divert stock intended for export to the domestic market. There is no shortage but for the first time in history, beverage plants are forced to shut down nationwide. There is no shortage, but one wonders if they haven’t surrendered the overcounted stock to a vote-counting machine.

There is no shortage but the sugar planters of Negros fear that the first harvest for 2022 will be down by as much as 30% to 40%. The harvest total is important. It determines the volumes between classes A and B sugar.

The Philippine harvest season for sugar starts in September. Remember that Typhoon Odette hit after the harvest had begun. The milling season starts immediately. Mills churn by November to get the sugar to the market. When input costs inflate as fast as they have, then harvesting tends to start early on the cost upswing also as a response to shortages. Both planters and millers try to avoid inflated costs by skimping on incredibly expensive fertilizers. And to avoid rising costs, they harvest prematurely. Catch 22. At the mill end, these result in less sugar.

The pandemic has not made a significant dent in demand as sugar is a major food, beverage, and pharmaceutical ingredient. Supply however has been severely constrained as old, even ancient technologies failed to upgrade even as manufacturing cost inputs increased significantly due to the economic downturn created by government’s responses to the pandemic. For years, exporting class A sugar earned higher revenues. Under the last administration, this changed. Domestic prices started increasing as local cost inefficiencies rose.

Generally, imports have been cheaper because of comparative technology efficiencies and economies. Worse, our government protectionist policies breeds complacency.

Unfortunately, fertilizer and pesticide costs increased, catalyzed by the crash of the peso. Field-to-mill transport and energy costs to operate mills likewise increased. The critical retail food supply chains, farm-to-market, rural-to-urban, provincial-to-Manila accesses fell to the Draconian control of military and police restrictions implementing the world’s longest quarantine period.

This unfortunate legacy of employing police powers such as raiding warehouses and accusing hoarders across the board without naming nor prosecuting them makes for dramatic action-packed six o’clock news footages. It gives the semblance of being in control.

That’s for table sugar. But for beverage and pharmaceutical industries, their need is for the highest-quality bottler’s grade liquid sugar processed through additional auxiliary filtration, ash, dextran and starch removal plus the application of acids and a charcoal process to ensure pristine purity, color standards and assured economic order quantities. The criticality of quality and quantity are subject to contractual requisites between refiners and beverage and pharmaceutical manufacturers. Not traders, much less warehouse bodegeros.

Typical of our officials, they redirected both debt and precious budgets to doles and an anachronistic anti-terror campaign. Again, the agriculture sector, despite its relative vulnerability and its marginalized farmers was backburnered where tariffication for such staples as rice, chicken, pork and even mackerel scad (galunggong) satisfied immediate demand. Rather than protect our fishermen, we surrendered our fishing waters and most probably bought our own fish from an expansionist hegemonic Communist superpower we consider our BFF.

As the sugar crisis unfolds and more politicians pander to publicity stunts and palliatives, these produce organizational disillusionment and disharmony. What the DA is short of is competent leadership. That is where the real shortage lies.

Dean dela Paz is a former investment banker and a managing director of a New Jersey-based power company operating in the Philippines. He is the chairman of the board of a renewable energy company and is a retired Business Policy, Finance and Mathematics professor.