The Sugar Regulatory Administration should issue “clear and coherent” rules for allocating sugar import volumes and determining the quantity of allowed total imports, amid the possibility that the crop year 2022-2023 would require at least 400,000 metric tons of imported sugar, Albay Rep. Joey Salceda said Sunday.
“We need rules now, so that the brouhaha over Sugar Order No. 4, as well as how Sugar Order No.3 was allocated, does not happen again. We now know what problems can arise when the rules are unclear. It’s time to define how the import volume is to be determined, and who gets to import what and how much,” he said.
The solon made the statement following the SRA’s pre-milling season estimate that the country will produce only 1.876 million MT of sugar this year, around 400,000 MT short of the usual minimum 2.2 million MT demand.
“The price of sugar here has always been three to five times the price of sugar in the world market. So, until we can sustain our own domestic demand, at the very least the rules for how much to import and who can import have to be clear,” Salceda said.
“The lack of transparent rules, especially an auction, could allow for corruption in the granting of import permits. In economics, when public resources are scarce, the best way to manage it is often through auctions,” he added.
It will generate funds for local industry development, instead of the supposedly “pro-rated” way the SRA allocates import permits, which of course favors incumbents and big players,” Salceda said.
“It should not be the decision of one government agency. Who gets to import at P20 or less and sell at P120 at retail is a unique privilege. It’s rent, basically. And it’s great power – and potentially a great source of corruption – if we do not harmonize the way these clearances are granted,” he stated.
“So, I am requesting the SRA: create clear, transparent, and accountable rules for allowing imports. When do we allow them in? Do we allow them when certain triggers about domestic supply become apparent? Or is it still a political decision? And who gets to import? Is it an old-boys club, or will we allow the free market to decide, via auctions?”
The Albay lawmaker is proposing the creation of a Local Sugar Industry Compensation Fund for the domestic sector, from auction proceeds.
“Charge them at just 10 percent of the differential between import cost of goods and local prices and you earn P1.8 billion for a typical Sugar Order of 300,000 MT. That is what we can give sugar farmers as direct compensation for the injuries incurred from imports. That is much more than the Sugar Industry Development Funds appropriated every year,” he said.
“I consider the auction fees important because we do not impose tariffs on sugar from Asean countries. So, in place of tariffs, these can fund local competitiveness programs as well as direct compensation, like the Rice Farmer Financial Assistance or RFFA funds,” Salceda cited.