Vince Alvic A.F. Nonato
27 October 2014
THE SENATE approved on third and final reading on Monday a measure seeking to make the sugarcane industry more competitive by consolidating small farms and reiterating the exemption of refined sugar for export from value-added tax (VAT).
In a statement, the chamber said Senate Bill No. 2400, or the Sugarcane Industry Development Act of 2014, sought to prepare the country’s industry for integration with the Association of Southeast Asian Nations (ASEAN) economic community by the end of 2015.
The bill, which was sponsored by agriculture committee chairperson Senator Cynthia A. Villar, would institutionalize the Sugar Regulatory Administration’s (SRA) Block Farming Program.
This program consolidates farms smaller than five hectares into blocks to make management “more professionalized” and ensure better delivery of assistance, Rosemarie S. Gumera, SRA policy and planning manager, said in a phone interview.
There’s a need to institutionalize the block farming system so it could be carried over the next administration, she said.
Owners of farms smaller than nine hectares, meanwhile, could avail of the Farm Support Program, in which they could be granted access to socialized credit through the Land Bank of the Philippines.
The bill also seeks to exempt refined sugar for export from VAT.
“The fear among sugar farmers is that they will not be able to compete with cheaper and government-subsidized sugar from abroad and this will directly impact their livelihood,” said Ms. Villar. “As it stands, we are self-sufficient in sugar but we are anticipating stiffer competition with cheaper sugar from abroad, particularly Thailand, which is the largest sugar producer among ASEAN countries with the Philippines coming in second.”
SRA’s Ms. Gumera said that the Tax Code already provides for refined sugar for export to be exempted from VAT, but traders tend to be charged for it before they could get their sugar out of the warehouse.
The programs established by the bill would be funded by the Sugarcane Industry Development Fund, which would be sourced from 15% of the VAT on local and imported sugar, as well as tariffs on the importation of sugar.
The fund would allocate 30% each to block farms, socialized credit for farmers, and research and development, while the remaining 10% would be given to scholarships for the children of sugarcane farmers.
The House of Representatives approved on third and final reading its counterpart, House Bill 4633, on Aug. 5. The measure, authored by Reps. Alfredo Abelardo “Albee” B. Benitez (Negros Occidental, 3rd district), Agapito H. Guanlao (Butil party-list), and Sharon S. Garin (AAMBIS-OWA party-list), was consolidated into the Senate bill on Sept. 9.