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Unyon ng mga Manggagawa sa Agrikultura [UMA]

#56 K-9 St. West Kamias, Quezon City


Tel/fax #: (02) 7992009/ Email: uma.pilipinas@gmail.com

Position Paper of the Unyon ng mga Manggagawa sa Agrikultura (UMA) on the Senate
Hearing on the Sugar Industry
28 January 2014, Sen. Recto Room,
Senate of the Philippines, 2/F GSIS Bldg., Pasay City
The current sugar bills in the Senate represent not only a flawed framework in the attempt to cushion the
sugar industry from the ill effects of the worldwide lowering of tariff rates on imported sugar by 2015, but also
their proponents complete lack of will to challenge the very evil that has made such scenario imminent:
liberalization in agriculture.
Legislators are calling for the strengthening of the sugar cane industry by establishing a so-called Sugar
Industry Development Fund/Sugar Industry Research and Stabilization Fund. There are also proposals to set up
Special Economic Zones (SEZ), promote block farming, and finance socio-economic programs in addition to
those in the Social Amelioration Program (SAP).
In all these, however, the Unyon ng mga Manggagawa sa Agrikultura (UMA) sees not a single concrete
provision on how to improve the conditions of the sugar farm workers. Designed basically to benefit only the
big planters and millers, these grand plans fall short of and even undermine the need to protect the already
ailing sugar industry from the intensifying onslaught of trade liberalization.
Only through the repudiation of unequal neoliberal trade and economic treaties, such as the GATT-WTO and
the Asean Free Trade Agreement (AFTA), and the implementation of genuine land reform can the crisis in the
sugar industry and in the whole sector of agriculture can decisively be resolved.
On the other hand, if the Legislature cannot as of yet be relied upon to pursue the aforementioned solutions,
it should at least try to look into the alleged cases of corruption by way of irregularly hefty bonuses of
executives in the Sugar Regulatory Authority (SRA), or into the reported anomalies in the implementation of
the SAP. It is very timely as well for the Senate to probe the extent of sugar smuggling in the country and set
up ways to preempt its escalation especially come 2015 when sugar tariffs for imported sugar, as dictated by
rapacious global neoliberal policies, finally becomes zero rated.

Negative effects of free trade on Philippine agriculture


The elimination of trade barriers is detrimental to Philippine agriculture. With the countrys agricultural tariffs
average now at an 8.7% and among the lowest in Southeast Asia, and especially as it is expected to go down
further to 5% by 2015 because of the AFTA, the government must seriously review its engagement in free
trade.

According to the research group Ibon Foundation, the marked fall of the agriculture, fishery and forestry
sectors from 22.6% of gross domestic product (GDP) in the early 90s to 16.8% in 2010,1 is attributable to
heightened trade liberalization.
The government meanwhile allots just 5.9% of its budget to agriculture; a very small percentage which
becomes even more insignificant considering that a big portion of which actually goes to the compensation of
landlords under the pro-haciendero CARP or CARPER.
The elimination of tariffs, very poor government agricultural support, unabated land-grabbing and land
conversion have all caused not only falling rural incomes but rampant joblessness in the countryside.

On the establishment of the Sugar Industry Development Fund/Sugar Industry Research and Stabilization
Fund
There is no truth to the premise that the SRA is lacking of funds and thus there is no need to institutionalize
the SIDF/SIRS which according to the Senate proposals will be administered by the same SRA anyway.
In 2012, the SRA registered a net income of P81,971,800 out of a total income of P409,321,690. The
Commission on Audit (COA) even chided it for granting performance based bonuses in the amount of P8,179
million for its officers and employees in 2012 even sans the authorization from the Governance Commission
for GOCCs.
The SRA is mandated by Executive Order No. 18 to promote the growth & development of the sugar industry
through greater participation of the private sector and to improve the working conditions of the laborers.
Republic Act 9367 s. 2006 (Biofuels Act of 2006) also mandates the SRA, as member of the National Biofuel
Board (NBB), to develop and implement policies supporting the Philippine Biofuels Program and ensure
security of domestic sugar supply. Why should there now be a need to set up another fund if its function will
be the same as that of the SRA?
The SIDF/SIRS is geared also to finance socio-economic programs in addition to those under the SAP in the
sugar industry. Yet SAP socio-economic programs have yet to be accomplished. The SAP funds furthermore do
not actually reach the real beneficiaries, practically serving as milking cow for planters, millers and the
government.2 The miller and the planter, who are the ones assigned by law to distribute the Cash Bonus Fund
(CBF) from the SAP directly to the sugar farmers and mill workers, withhold what is due the beneficiaries.
Below is a table on the unclaimed/undistributed CBF still with mills, planters associations and cooperatives
which totals P407m + as of 2012. Nobody also has been penalized for this infringement.

1
2

Learn lessons from agri liberalization, government urged, October 11, 2013 http://ibon.org/ibon_articles.php?id=339
PRIMER On the Social Amelioration Program in the Sugar Industry (2013) (Unyon ng mga Manggagawa sa Agrikultura - UMA)

Furthermore, the workers are having a hard time availing of maternity and death benefits. Most of the funds
for socio-economic projects are cornered by 3 big groups of planters and millers and large chunks of the SocioEconomic Program Related Fund (SEPRF) are used as investments by the Bureau of Workers with Special
Concerns (BWSC) which is under the Department of Labor and Employment (DOLE).
The workers also have no real voice in the National Tripartite Council (NTC) and District Tripartite Councils
(DTC) because they are in the minority in both bodies.
There are also many anomalies which the COA has recently discovered involving both the CBF and SEPRF and
none has yet been prosecuted. This includes non-distribution of the Cash Bonus Fund to the workers and nonremittance of unclaimed/undistributed funds to DOLE Regional Offices.
The government is admitting that the workers in the sugar industry and their families are indeed in dire straits.
Yet the corruption emanating from the SRA and SAP must be addressed first before any additional funding is
allotted. The SAP thus in this sense becomes a white elephant.
On Special Economic Zones and the Present Situation of Agricultural Workers
Special Economic Zones (SEZ) have their own authority to administer itself on economic, financial, industrial,
tourism development and such other matters within the exclusive competence of the national government.
Companies within such SEZs are accorded tax holidays and other perks. They do not also comply with basic
labor standards such as safe workplace, and payment of minimum wage and other benefits. An unwritten no
union, no strike also prevails inside SEZs.3
Agricultural sugar workers or ASWs live a very oppressed life. They dont have any land to till whether they are
regular or migratory workers as they are the primary victims of land monopoly in the country. They are the

Keppel tragedy should prompt review of govt mandate over ecozones labor NGO, http://www.eiler.ph/tag/subic-shipyard/

children of small tenant farmers who need to pay land rent and sell their labor force to augment their income
for their daily needs.4
ASWs only have work during planting and milling times. They do not earn anything in between these periods
called tiempos muertos (dead seasons). They only have work from 6 to 9 months and during these times
they do not have work every day.
In times when there is no work in the sugar cane fields, others migrate to work blacksmiths, construction
workers or farm workers in rice fields. Some of them are hired as caretakers of rented lands that are leased
on a daily basis, while others are hired by landlords and are paid at tenancy rates.
In Negros Occidental 95% of the ASWs are paid the pakyaw rate. In essence this is a form of contractualization.
ASWs are only paid from P500 P1000 every 15 days or only P1000 P2000 in a month.
According to DOLE the pakyaw rate is legal even if its Regional Wage Board in Negros has pegged the
minimum wage for plantation and agricultural workers at P245 and P235 daily respectively. This, however, is
not recognized by NFSW because it believes that there should only be one minimum wage in the whole
country which stands now at P446 in the National Capital Region (NCR).
The situation in Batangas is almost the same where the pakyaw rate is widespread and most workers are
contractual. The pakyaw rate however is higher, compared to Negros which is P1500 for every 15 days. There
is also a wage system based on the tonnage one can cut in a day. For a migratory worker, the rate is P120 180 per ton while locals get P180 - 200.
Organizations in Batangas under the Sugarfolk Unity for Genuine Agricultural Reform (SUGAR-BATANGAS) are
demanding a daily wage of P350 per ton and P525 a day from the Department of Labor and Employment
(DOLE).
In Bukidnon province in Mindanao, the common wage of ASWs is P150 a day while the minimum wage there is
P274 a day.

On Sugar Block Farming


Sugar block farming on the other hand, essentially facilitates the reconcentration into big landlord control of
agricultural farms supposedly awarded to farmer-beneficiaries. An example of this is whats happening In
Hacienda Luisita.
The Luisita Estate Management (LEM) group of financier-agents of the Cojuangco-Aquino clan has been
subverting farmworkers claims through illicit leasehold agreements even before actual land allocation. They
dictate what crops to plant, when and where to plant, and where to sell the produce.

PRIMER On the Social Amelioration Program in the Sugar Industry (2013) (Unyon ng mga Manggagawa sa Agrikultura - UMA)

After the DARs sham land distribution, farmers whose lots would be included in a block farm would just be
hired as the farmworkers that they were for decades, and will split profits, if any, with Agrarian Reform
Beneficiaries Organization (ARBO) officers and financiers an organization that practically serves the same
function as the Cojuangco-Aquinos LEM. This scheme generally perpetuates feudal and semi-feudal relations.
Smuggling of Sugar
The Philippines has no official data on imports of sugar from Thailand but Thailand reports that it exports
sugar to us5, which is found below.
Year
2007
2008
2009
2010
2011

Metric Tons
89,519
96,395
77,553
277,994
121,821

Also, imports of ethanol from Thailand grew from 24 Million Liters in 2011 to 90 Million Liters in 2012.
Philippine production in 2012 was only 15.7 Million Liters even if the government boasts that it has a
combined production capacity of 133 million liters.
According to the Global Agricultural Information Network (GAIN) of the US Department of Agriculture (USDA),
Thai sugar is cheaper to produce. In April 2013 a metric ton of sugarcane sold for about P2,200 ($55/MT at
$1=P40 ). In comparison, Thai farmers received 1,154 baht/ton ($34/MT) in 2012.6
The GAIN also reported that the Thai government subsidizes sugarcane production by setting a support price
in MY2011/12 at 950 baht/ton ($31.7/MT). In addition, on March 19, 2013 the Thai Cabinet approved direct
payments to farmers totaling 160 baht/ton ($5.3/MT).
It also maintains its price control policy on sugar which was established in May 2008. The 2008 policy fixed
prices at 19 baht/kg ($29 cent/lb.) for refined sugar, ex-factory wholesale (excluding 7 percent value added
tax). Retail sugar prices (including the value-added tax) will also remain at established 2008 prices at 21.85
baht/kg ($33 cent/lb.) for white sugar and 22.85 baht/kg ($35 cent/lb.) for refined sugar.
The government will use the value-added tax collected from domestic sugar sales to repay the Bank for
Agriculture and Agricultural Cooperatives (BAAC) for the costs of operating the state-run Cane and Sugar Fund
(CSF). The CSF provides the funds necessary to carry out the various sugar programs such as the price support
and direct payment programs.

Impact of Thai Sugar Policy on the World Sugar Economy FAO/FIJI Sugar Conference August 22, 2012 Rangsit Hiangrat Director Cane and Sugar Industry Policy
Bureau Office of the Cane and Sugar Board, p. 31 of PPT presentation
6
Philippines Sugar Annual, Global Agricultural Information Network, 2013

There is some similarity though between Thai and Philippine cane sugar farms as the average farm size in
Thailand is 4 hectares. Thai industry sources also describe low productivity of 65 tons per hectare and that
only 10% of cane sugar farms are irrigated.

Conclusion
UMA and its affiliate organizations assert that the government should acknowledge that the unabated decline
in agriculture is due to its decades-long engagement in free trade which has only aggravated the vulnerability
of a backward, agricultural, pre-industrialized and foreign dominated economy. The government definitely
needs to rethink its policies.
For agriculture to become the base of economic development, the state's economic program including its
foreign trade policy should include protecting and supporting small farmers to develop local agricultural
production, increase rural employment, and achieve food self-sufficiency.
Particularly in the sugar industry, the government should resist AFTA and uphold farmers and farm workers
rights. They should be provided with subsidies and other financial and logistical assistance not through block
farming which will only re-concentrate lands to big landlord clans and corporations. The practice of big
planters and millers expropriating huge profits from exploiting the workers must stop. A Genuine Agrarian
Reform Program combined with a national industrialization policy must be enshrined and implemented.
We call for the following:
1. Oppose AFTA and GATT/WTO
2. Investigate the following:
a. Anomalies in the SAP
b. Anomaly in the granting of bonuses in the SRA
c. Smuggling of sugar in the Philippines
3. Scrap the proposal to set-up
a. Special Economic Zones
b. Block Farming
4. Ensure decent wages and benefits to agricultural and mill workers
5. Provide free distribution of land to agricultural workers
6. Enact the Genuine Agrarian Reform Bill (GARB) and Embark on National Industrialization