Japan to Strengthen Philippines Sugarcane Sector with Partnership Agreement

Japan will be providing financial assistance of 800 million yen or P377 million to assist as many as 84,000 Filipino sugarcane farmers affected due to the coronavirus pandemic as this help is under the commitment of Japan under the Philippines-Japan Economic Partnership Agreement (PJEPA). The Sugar Regulatory Administration (SRA) is set to distribute farm machinery and implements to sugar planters and farmers.

Secretary of Foreign Affairs Teodoro L. Locsin Jr. and Ambassador Koji Haneda of Japan signed and exchanged diplomatic notes at the Department of Foreign Affairs headquarters on June that firmed up the latter’s support for two major Philippine infrastructure projects, as well as grants for agriculture development. According to the media reports, the grant includes the provision of farm machinery such as tractors, harrows, whole-stalk sugarcane planters, and mulchers, among others.

This will help the Philippine sugar sector to increase its productivity by reducing the cost of production. According to the Embassy, the aim is to help farmers who are financially distressed due to coronavirus pandemic. The Sugar Regulatory Administration (SRA) is set to distribute P374 million worth of farm machinery and implements to sugar planters and farmers which were granted to it by the Japanese government.

SRA Administrator Hermenegildo R. Serafica, who was on top of the negotiations with the Japan Embassy and Department of Finance (DOF) officials for the said grant, said this Official Development Assistance (ODA) has already been finalized and that the aid would be delivered in the Philippines in the form of farm machineries and farm implements amounting to 800 million Japanese Yen. This, according to Serafica, will be distributed by SRA to qualified and SRA-accredited planters organizations or foundations and block farms across the country.

Under this grant, the service fee for the Japan Procurement Agent will be deducted from the grant amount, while SRA will shoulder the duties and taxes once the farm machineries and farm implements will arrive in the customs territory. Serafica said the main objective of the Japan Grant Aid is for the socio-economic development of the Philippine sugarcane industry. According to him, this program originated from the commitment of Japan under the Philippines-Japan Economic Partnership Agreement (PJEPA).

Foreign Affairs Secretary Teodoro L. Locsin Jr. (left) and Ambassador Koji Haneda exchange diplomatic notes on official development assistance

This was “steadily pushed by the agriculture negotiating team headed by former Agriculture Undersecretary Segfredo Serrano, who never gave up and constantly coached SRA in the submission of an industry project which will benefit the majority of the industry stakeholders”, Serafica further said. In April, SRA sought interventions from the national government to address the declining price of domestic sugar.

“We recently saw an abnormal price drop, in some cases as big as P200 in just two weeks, and before this gets worse, we are appealing for immediate intervention from the national government,” SRA Board Members Emilio Yulo and Roland Beltran said in a joint statement in April. Yulo represents the planters in the SRA Board, while Beltran represents the sugar millers.

The two officials said Land Bank of the Philippines (LANDBANK) and other government financial institutions must step in and provide quedan financing to the local sugar industry, “we are afraid that the drastic drop in sugar prices will cause a disastrous effect in the long term period, vast majority of the industry’s stakeholders who are small planters and agrarian reform beneficiaries, which comprise about 92 percent of sugar producers, will not be able to survive this downtrend in prices, especially during the national health crisis brought about by the coronavirus disease 2019 (COVID-19)”.

According to the embassy, the exchange of notes “further cements Japan’s status as the Philippines’s top provider of official development assistance for decades, and a vital partner in achieving the country’s development goals.” Last year in Tokyo, President Duterte called Japan the “gold standard” for Philippine development cooperation with foreign partners.

Non-project grant agreement for the economic and social development program of the Sugar Regulatory Administration: Costing ¥800 million (about P377 million), this is a follow-up to the 2001 grant aid farm-mechanization program aided by the Sugar-Agricultural Competitiveness Enhancement Fund. It will finance, among others, 94 units each of tractors, harrows, whole-stalk sugarcane planters and munchers.

In a statement, the embassy acknowledged the local sugarcane industry as one of the cornerstones of the Philippine economy. The initiative will strengthen the sugar production sector through reduced production costs and increased productivity. More than 84,000 Filipino sugarcane farmers, whose meager sources of income are adversely affected by the pandemic, will benefit from this grant aid.