Sugar stakeholders decry sharp budget cut

From P2 billion to P67 million.

Such was the drastic cut in the budget intended for the programs under the Sugarcane Industry Development Act (Sida) after the Department of Budget and Management allocated only P67 million for the law under the government’s Tier 1 budget for 2020.

While the Sugar Regulatory Administration (SRA) is looking to propose a bigger budget for Tier 2 of P1.2 billion, the second half of the government’s national budget is often intended to expand or supplement existing programs and projects.

Of the budget approved by DBM, P50 million was intended to finance scholarships while P16.67 would be used for the construction of farm-to-market (FMR) roads.

Under SRA’s proposal for Tier 2, it is asking for P965.54 million for FMRs, P16.8 million for bridge construction and P214.91 million for research.

SRA chief Hermenegildo Serafica said they already presented a counter proposal to fight for a bigger allocation for Tier 1, but this was still subject to DBM’s approval.

For 2020, the DBM is considering a P4.1-trillion national budget, the bulk of which would be used to accelerate projects related to infrastructure, antipoverty and employment.

The Confederation of Sugar Producers (Confed), one of the biggest sugar groups in the country, lamented the DBM’s move, saying that the agency “does not fully understand the implication of the huge slash in the Sida fund will do to an already embattled sugar industry.”

“We have been often told that the only way for our sugar industry to be globally competitive is to improve our productivity for which the Sida law was created … this drastic cut, which is not even 5 percent of the original allotment as enshrined in the Sida, makes a mockery of the law and of the sugar industry,” it added.

The Sida, signed into law by former President Benigno Aquino III in 2015, was meant to increase the competitiveness of the sugarcane industry and improve the incomes of farmers and farm workers through the establishment of block farms, FMRs and the provision of scholarships.

Under the law, programs under the law should be given a budget of P2 billion annually, but this has been reduced over the years.

Last year, the Sida fund was slashed to P700 million, this year to P500 million, and for 2020’s Tier 1, P67 million.

Sen. Cynthia Villar said the reduction was due to SRA’s underutilization, but SRA board member Emilio Yulo blamed bureaucratic bottlenecks, especially the difficulty of securing financing from government-owned Land Bank of the Philippines.

“Personally, except for the FMRs, I have not felt the Sida law at all,” Confed spokesperson Raymond Montinola said. “We have continuously urged to revisit the law, especially the implementing rules and guidelines, which have been very constricting for the sugar producers to access, particularly the small planters.”

The implementation of Sida programs is especially crucial for an industry that is currently being threatened by liberalization, wherein the importation of sugar will not be regulated.