The need to revive the anti-smuggling task force and tackle tariffs for ethanol and sugar to protect local sugarcane producers from cheap imports will be discussed with Agriculture Secretary Domingo Panganiban today.

Panganiban is arriving in Negros Occidental for the inauguration of the Balay sang OPSI (Outreach Program for the Sugar Industry), which is a dormitory and training center of the Sugar Regulatory Administration in La Granja, La Carlota City, SRA Administrator James Ledesma said.

On his arrival in Bacolod, Panganiban will have breakfast with leaders of the Confederation of Sugar Producers Associations where concerns of the sugar industry will be raised, CONFED president Reynaldo Bantug said yesterday.

We will ask Panganiban to look into the revival of the anti-smuggling task force because we need to watch our back door to prevent the entry of cheap smuggled sugar, Bantug said.

We also need to discuss tariffs for sugar and ethanol produced from sugarcane, he said.

Bantug pointed out that under the ASEAN Free Trade Agreement tariff for sugar is set to go down to 5 percent by 2010 and we are hoping to at least keep it at 20 percent for a little longer, he said.

Hopefully, ethanol produced from sugarcane will also cushion the soft prices of sugar, he said.

We, however, have to discuss ensuring enough sugar for domestic consumption once sugarcane is also used for the production of ethanol, he said.

We also have to ensure that once distilleries are in place for the production of ethanol that the domestic market is not disadvantaged with dumped cheap ethanol from Brazil, he added.

He noted that the tariff for imported ethanol is currently 1 percent since the product is not produced locally yet but he hopes that it will be raised to 10 percent when local production starts.

With a 5 percent blend of ethanol with gasoline the country is estimated to need 200 million liters of ethanol a year, Bantug said.

The ethanol plant being built in San Carlos City that is targeted to be operational in 2007 expected to produce 30 million litters annually, so that means at a 5 percent blend we would need about 10 ethanol plants, he said.

He pointed out that petroleum companies, in fact, are already starting to blend 10 percent ethanol with gasoline.

For new vehicles the ethanol blend with gasoline could even go up to 20 percent, he said.

The Ethanol Board to be created will be chaired by the Department of Energy but we want the sugar industry to be strongly represented in that body, he said.

Bantug said the planters also hope to discuss the rising prices of farm inputs with Panganiban today.

He also said that while the LandBank of the Philippines is giving sugar producers a quedan line they are asking Panganiban to direct the National Food Authority to buy sugar as a fall back measure to ensure prices stay above production cost as soon as a portion of the new crop's years produce is placed on reserve.

The LandBank is prepared to provide quedan financing as long as 15 percent equity is put up. For small farmers short of equity, NFA financing through a buy-back scheme is needed, he said.

Last crop year the NFA bought reserve sugar at P680 per Lkg and when prices went up towards the end of the crop year planters were able to buy back their sugar at the same price plus interest and sell at prices above P800 per Lkg, he said.

The main objective of the NFA buy-back scheme is to help the farmers, and the NFA at the same time makes money on interest paid, he said. Last year we were able to get rid of our surplus sugar so supply is back to stable so we expect better prices in the new crop year, Bantug said.*CPG

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