RP sugar millers plan land conversion

RP sugar millers plan land conversion

BACOLOD, Philippines (Reuter): Philippine sugar millers said they planned to turn at least some of their land into industrial estates amid declining productivity and a more open global trading environment.

"Six millers have plans to put up industrial estates," Philippine Sugar Millers Association (PSMA) executive director Jose Maria Zabaleta told Reuters.

Zabaleta was attending a forum in the central Philippine city of Bacolod to map out a blueprint for the conversion of a portion of their lands to industrial use.

"The forum on different opportunities in the sugar industry was very appropriate as we adjust ourselves to the changes in the business environment and face competition of an open sugar market in the near future," said Carlos Tupas, executive vice-president of Victorias Milling Co.

Daniel Lacson, former governor of Negros Occidental province, a sugar producing center, said the industry had to diversify into non-sugar areas because of its cyclical nature.

"Diversification is necessary so that even if sugar prices drop in the world market we will continue to stay alive," Lacson said.

Lacson also said diversification was necessary to help the formerly highly protected local industry prepare for the emergence of a liberal global trading environment.

He said at least 3,000 hectares (7,410 acres) of Philippine sugar land had been converted into fish ponds in the 1980s after sugar prices slipped on the world market.

"We cannot survive by just being an agricultural economy. We've got to industrialize," he said.

"We need to draw up a master plan that will identify land that should stay as sugar plantations and lands that should be moved out from sugar."

Industry leaders said setting up industrial estates would not affect domestic output. PSMA deputy executive director Vicente Castro said the proposed industrial estates would only eat up a small portion of the sugar lands.

"The areas to be covered are insignificant as millers are only looking at 10 to 30 hectares for conversion into industrial estates. What is actually critical at this point is for us to increase our crop yield," he said.

The Philippines sugar crop yield dropped to 69 piculs per hectare last year from 84 a decade ago due to lack of new technology and decreasing productivity, he said.

This compares to 120 piculs per hectare in major exporter Thailand, Castro said.

Millers say Philippine sugar output faltered from 1990 as banks refused to accept farmers' land as collateral because of uncertainties over ownership caused by an agrarian reform program. The program was designed to break up large landholdings and distribute it to landless farm laborers.

"Productivity of land distributed to small farmers suffered because some of them did not have enough funds to buy farming implements," Castro said.

The Philippines, once a major sugar exporter with overseas sales peaking at 2.0 million tons in crop year 1976/77, is now a net importer of the commodity due to rising consumption in an expanding economy.

"Ten or 12 years ago we were producing 2.6 million tons of sugar with consumption at only 900,000 tons. This year crop consumption and production is almost equal at between 1.7 and 1.8 million tons," said Lacson.