January 31, 2020
Madelaine B. Miraflor (Manila Bulletin) | https://bit.ly/2vjo1vF
While its stakeholders are being threatened with plans of liberalization, Sugar Regulatory Administration (SRA) has moved to conduct an industry benchmarking with one of the largest sugar producing countries in the world, Thailand.
The move will help the Philippine government know what kind of best practices it can apply to the country’s struggling sugar industry.
A statement showed that it was SRA Administrator Hermenegildo R. Serafica himself that attended the benchmarking analysis with Thailand’s sugar industry. He was accompanied by Philippine Sugar Millers Association (PSMA) Executive Director Jesus Barrera.
To be specific, they met with the Rangsit Hiangrat, director general of the Thailand Sugar Millers Corporation (TSMC), and Samart Noivun, director of the Office of the Cane and Sugar Board (OCSB).
The delegation also met with Thailand’s largest sugarcane growers association, which has 98,000 members and operates in a total area of 300,000 hectares.
Right now, Thailand is one of the largest sugar producing countries in the world with 1.6 million hectares of land solely devoted to sugar.
SRA said the success of the Thai sugarcane industry is mainly anchored in the organized, collaborative and supportive effort of the Thai government, millers and sugarcane growers.
What they normally do is that OCSB — members of which is composed of five representatives from the government, nine representatives from the sugarcane growers and seven representative of the factories (sugar mills) — gets to set the sugar prices at the start and end of the milling season and it also announces the start of each milling season.
The Thai Cane and Sugar Act of 1984 mandates a 70:30 revenue sharing scheme for growers and millers where the growers receive 70 percent of the total revenue from the sugarcane, less costs and taxes, and mills earn the remaining 30 percent.
Whereas here in the Philippines, the sharing can be 60 percent to 70 percent for growers and 30 percent to 40 percent for mills depending on the mill and what is being shared is only the sugar and molasses produced from the sugarcane.
In Thailand, all sugarcane growers are registered to the mill where they will deliver their canes and the growers commit a certain volume of cane to the mills to which they are registered.
At the end of the season, Thai growers receive an 80 percent initial payment of the share expected, calculated based on a base price determined by OCSB at the start of milling.
Deliveries of sugarcane to the sugar mills are also programmed and scheduled by the mills from their registered sugarcane farmers and the time between when the sugarcane is harvested from the farm to the time it is fed to the crusher of the mill is under 20 hours hence the efficiency and recovery of sugar is high which is beneficial to both growers and millers.