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What happened to the P12B allocated to modernize sugar industry?

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THIS is another case of what I always thought has been one of the biggest problems of our nation: Yes, we are a nation of laws, but we seem to pass laws and then forget about them.

In the case of the Sugar Industry Development Act passed in 2015, we forgot that a huge P2 billion was allocated to the industry yearly to improve its productivity.

Whatever happened to the P12 billion allocation in six years, that there is not an iota of evidence to show that our sugar industry is improving its productivity?

All the dire armchair pontifications about the sugar industry, that it is so unproductive it should be allowed to die a natural death upon the government’s lifting restrictions on importations ‚ÄĒ that it is a zombie industry, dead but unburied, one columnist declared ‚ÄĒ miss one important thing: there is a state policy that it is an industry that will be made competitive with massive government financial and organizational help. That policy hasn’t been changed.

This policy is enshrined in a law passed by the 16th¬†Congress¬†on July 28, 2014, and signed into law by President¬†Benigno Aquino¬†3rd on March 27, 2015: “An Act Promoting and Supporting the Competitiveness of the Sugarcane Industry and for Other Purposes.”

What happened to funds released for the Block Farming Program? SOURCE: COMMISSION ON AUDIT

I have not studied the sugar industry in enough detail or the Act’s history so I cannot say if this law is one of the few contributions of Aquino 3rd to the country, or on the other hand, if it is another classic case of a weak republic captured by oligarchs. In this case it was Aquino’s major political base, the sugar landlords of Iloilo and the Negros provinces that produce over 60 percent of the country’s sugar, which intensely pushed for its enactment that it was passed and signed into law in a record six months.


The law, called the Sugar Industry Development Act (SIDA) is crystal clear in its Section 2, on this Republic’s policy, as determined by the people whom we elected to pass laws (the Congress):

“It is hereby declared the policy of the State to promote the competitiveness of the sugarcane industry and maximize the utilization of sugarcane resources, and improve the incomes of farmers and farm workers, through improved productivity, product diversification, job generation, and increased efficiency of sugar mills.”

For these purposes, the State shall: a) establish productivity improvement programs; b) provide the needed infrastructure support; c) enhance research and development of other products derived from sugar, sugarcane, and their byproducts; d) provide human resource development and extension services; and e) provide financial assistance to small farmers.”

Think up of any program to improve the sugar industry and this is already called for by SIDA, from consolidating small farms (to so-called block farms), socialized credit for farm support and mechanization, research and development, infrastructure, and even scholarships for poor sugar-farm youth.

P2 billion

The law allocated P2 billon each year for the program starting in 2016, which means that the government up to last year had allocated P12 billion for the sugar industry. Was this allocated and used according to the law? Hardly.

A major component of SIDA was the “Sugarcane Block Farm” program which involved consolidation of small farms of 10 hectares and less into block farms, with a minimum of 30 hectares each, with the objective of increasing sugarcane productivity to 75-ton cane per hectare by introducing good sugarcane farming. It was hardly carried out. The Commission on Audit’s 2021 report on the¬†Sugar Regulatory Administration¬†(SRA) found out however that:

“The Block Farming Program of SRA shows an under-utilization of its fund on its fifth year of implementation as only P768.835 million, or 65.5 percent out of the total budget amounting to P1.174 billion has been incurred as of Dec. 31, 2020.” Out of the P1.2 billion allocated for the block farming program, only P769 million had been utilized. As a result, the SRA had set up only 213 block farms, comprising 8,500 hectares ‚ÄĒ an insignificant 6 percent of the 140,000 area of small sugar farms. Statistically, that means the block farming program was not implemented.

A research study on the sugar industry released in October 2020 by the¬†National Economic¬†and¬†Development Authority¬†(NEDA) also concluded: “Another major program of the SIDA, the Socialized Credit Program, was supposed to have a total allocation of P1.2 billion from 2016-2019, but only P624 million was approved for release, of which only P111.5 million was actually released to borrowers. Utilization rate was thus only 17.8 percent of approved funds and 9.3 percent of the SIDA-prescribed allocation. “


The CoA report even pointed out that for 2018, funds for SIDA’s programs for the provision of tractors and provision of livelihood projects for Luzon and Mindanao were released but were not utilized at all. For the Visayas, in 2019, more than 90 percent of SIDA funds for farm mechanization support and livelihood development were released but unused by the SRA.

SRA officials told the CoA that the Covid-10 pandemic was to blame as it hampered its work in implementing the SIDA. The NEDA report however says the SRA is organizationally incapable of implementing the sugar industry reforms.

“The SRA is organizationally challenged to perform developmental roles that support its regulatory functions and its overall implementation of SIDA.

SRA’s current staff complement is observed to be highly competent and dedicated, but ill-equipped for the expanded challenges posed by SIDA and the current development landscape. The agency’s structure is heavy on regulation and much of staff time and resources are spent on their enforcement. Its developmental function is largely on R&D, which is focused on development, propagation and distribution of high-yielding varieties of sugar points.


Its structure, competence and staff complement remain unchanged even after its designation as the primary implementer of SIDA, which requires a different set of competencies, and larger staff and budget support. While the agency has formulated a restructuring plan, this has yet to be fully implemented.”

Even as it is the SIDA’s lead implementer since 2016, the SRA doesn’t even have an annual report on how it has implemented what is really the landmark reform program, required by law. All it has on its website are poorly organized data on the implementation of SIDA.

My suspicion is that from its leadership down to its lower-ranking officials, the SRA has been focused on coming up with data to justify continuous sugar importation. Be suspicious and the “why” would become clear enough.

How can we say that we should give up the sugar industry, when a program to strengthen it practically wasn’t implemented?

The neoliberal believers seem to be ignorant of the fact that 54 rich countries and 12 emerging economies provide over $700 billion each year in some form of support to their agricultural sector. And we say we just leave the fate of our sugar and other agricultural sectors to market forces?

The Agriculture secretary certainly has his work cut out for him.

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This Post Has 2 Comments

  1. Reynaldo M. Fuentes

    Whilst I truly appreciate the factual reporting, I dare say I share your concern…..what happens to this report? Nothing ! Who is supposed to act on it? Nobody ! Where is the Unused Money now? “I will find out, your Honor”! Is there a process in place to be followed on critical matters like this ? Nobody knows or is aware !

    Yet, our elected politicians or Government Officials pag umasta boast that things are in order, successfully communicated through sorrupted transmission lines.

    The onus of causing change lies in us, the citizenry…..to be more demanding for improvement…..by stipulating the appropriate measures to be undertaken. Sad but true, the Blue Ribbon Committee hearings reveal our Department Secretaries, our politicians, are not fully aware and conscious of what their respective roles and responsibilies are….as you hear a reply, “I don’t know !”to a pertinent question. Often have I muttered, “This guy should be given his Job Description, for study ! There is utter neglect of job function….and pre-occupation on corruption. Job familiarization for year 1 looks like a good place to start.

    Lest I forget, the Private Sector is characterized by the requirement of performance reports: Monthly, Quarterly, Mid Year,Assessment, Year End……in all Departments…..thus the awareness on the status of things and what work needs to be done….not in the Government, as far as I know…..preoccupation is with something else !

    Thank you for your article and your time. Ingat.

  2. Dorina Rojas

    We always learn our lesson the hard way , we look for food only when hungry. Also, our businessmen may always find it more convenient and cheaper to import than support local producers who are inconsistent suppliers due to problems that have been long unsolved. And it goes deeper and more complicated all the time. We have started something better this time, hopefully.

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