Mechanization, ethanol production keys to sustain sugarcane industry

Stakeholders of the country’s sugar industry have agreed that mechanization and ethanol production are the keys to a more sustainable and globally-competitive sugarcane industry, the Department of Agriculture said.

About 100 sugarcane industry stakeholders attended the consultation initiated by

Agriculture Secretary Proceso Alcala on August 5 at the Sugar Regulatory Administration offices in Quezon City.

Last week’s dialogue was a follow-up to the meeting held on July 8 to address major concerns and map out industry direction to increase production of sugarcane and ethanol, achieve stable domestic supply and prices of sugar, and increase farmers’ incomes.

Alcala said these goals are all geared towards making the country’s sugar industry globally competitive, in the light of the implementation of the ASEAN Free Trade Agreement.

Tariff rates on imported sugar from competing ASEAN countries will be gradually reduced from the current 38 percent to only 5 percent by 2015. By 2012, tariff rate will further go down to 28 percent, 18 percent by 2013, and 10 percent by 2014.

“We have to prepare the country, sugarcane farmers, and everyone. We therefore have to increase the production of sugarcane for both sugar and ethanol,” he said.

For their part, sugarcane farmers particularly members of sugar Mill District Development Committees (MDDCs) said government should help provide the necessary equipment particularly tractors, irrigation systems and trucks. There are currently 30 MDDCs throughout the country, composed of farmers, millers and other stakeholders.

Other farmers also clamored for more farm-to-market roads in major sugar producing provinces for faster and more efficient transport of canes to the mills.

As source of fund to bankroll their equipment needs, the MDCCs propose that the performance bond and service fees from sugar imports be turned over to the SRA. Currently, sugar imports are done by the National Food Authority, with the agency receiving said fees. They will submit the resolution to Alcala, for his consideration and endorsement to President Aquino for approval.

Meanwhile, the MDDCs are optimistic on increasing the country’s production of ethanol.

Under the Biofuels Act of 2006, fuel companies are currently required to blend ethanol with gasoline, at 5 percent this year, and 10 percent next year. Current ethanol demand is estimated at about 219 million liters versus domestic production of merely 80 million liters, derived from sugarcane and molasses.

Next year, demand would more than double to 460 million liters of ethanol.

During the dialogue, members of the Ethanol Producers Association of the Philippines complain that current tariff on imported ethanol is too low, at only one percent, hence pricing out locally-produced ethanol.

They propose that it should be increased to 20 percent to protect the local ethanol industry, and attract more investors into the country.

The ethanol producers also asked the immediate issuance by the Department of Energy of a Department Circular on new set guidelines to import ethanol. They said the DOE has conducted several consultations on the matter, but until now it has not issued the much-needed circular. Importers are using the old DOE guidelines prior to the enactment of Biofuels Act of 2006.

Small farmers also requested for more accessible and affordable credit to enable them to buy high-yielding sugarcane seed pieces, fertilizers, other farm inputs and postharvest equipment.

Alcala said the DA will seriously consider the concern, and enjoined small farmers to organize themselves into clusters or cooperatives so they could avail of needed financial assistance.

source: thenewstoday.info