Address cartel first, NEDA says on sugar

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    The National Economic and Development Authority’s top official (NEDA) identified cartel as among the problems in the sugar industry that can be addressed first, before considering the planned liberalization which has not received support from lawmakers.

    Ernesto Pernia, socioeconomic planning secretary, was asked to comment on the senators’ recent unanimous approval of Senate Resolution 213, urging the executive department not to pursue the planned liberalization of the sugar industry, in view of safeguarding the welfare of sugar farmers and industry workers in more than 20 provinces in the country.

    To recall, NEDA previously said it is pushing for freer sugar importation, to bring down the high cost of sugar in the retail market.

    However, the Senate last week urged the appropriate Senate committees to conduct an investigation, in aid of legislation, into the impending liberalization of the sugar industry “with the end in view of safeguarding the welfare of 84,000 sugar farmers and 720,000 industry workers in 20 provinces of the country.”

    “The liberalization of sugar, we will probably do it slowly. We’ll try other steps first, if they succeed, then there may be no need for a full scale liberalization,” Pernia told reporters on the sidelines of a forum held in Ortigas yesterday.

    Asked about the problems in the sugar industry, Pernia said: “I think its cartelism, cartel.”
    Pernia said the challenge is on how to break the sugar cartel.

    “The Philippine Competition Commission can contribute something to improving the supply of sugar and the prices,” Pernia said.

    “I think the problem (is)… there are too many handlers, too many middlemen involved in the process,” he added.

    Asked if there is collusion among traders to keep sugar prices high, Pernia said: “That has to be investigated.”

    The Department of Finance (DOF) also earlier said it respects the position of legislators on the planned liberalization of the sugar industry, noting a need to discuss other aspects involving the sector.

    “We will respect the desire of the Senate to discuss this at length and I think it’s a right move. We will respect the desire of the legislators and we will discuss it with them but I said it’s not only going to be talking about liberalization, it’s also going to be talking about improving the efficiency of the mills, how do you incentivize that? And of course in the cane production side, it’s a long discussion,” Carlos Dominguez, DOF secretary, told reporters at the Senate lounge in Pasay City last week.

    “If everybody sits down, will be reasonable, I think we can arrive at a good solution, basically improving the yields, improving yields from the farm and yields from the mill, and satisfying the local demand and possibly even exporting and being competitive worldwide,” he added.