|Problems & Constraints
of the Industry
The following are the identified
problems and constraints that hinder the growth and expansion
of the sugar industry in the Philippines, specifically in the
Bicol Region and the province of Camarines Sur:
1. Low Productivity
Records show that the average
yield of sugarcane per hectare in Bicol and Camarines Sur in
crop year 2000-01 is 43 ton or 50.52 bags of sugar per hectare,
which is 39% way behind the average yield of 70 tons/ha of sugarcane
or 70 bags of sugar in Bukidnon and Negros sugar districts.
Following are some of the factors
that contribute to low farm productivity of sugarcane plantation
in the region/province:
a). Use of Old released Variety
Sugarcane planters in the districts
are not particular in choosing the right cane variety to use.
Majority about 65% still use the old variety, Phil 6667, Phil
56226 and Phil 6723 released in 1974. Some other, about 13%
practiced the use of mix varieties (Refer to Table 3).
b) Inability of Many Farmers
to Apply the Necessary Farm Inputs
Majority of the planters about
83% are considered small farmers (below 5 hectares) with income
below the poverty level hence cannot afford to sustain the input
requirement in sugarcane farming without outside financial support.
As they are relying solely from the releases of production loan
from cooperatives and or PENSUMIL, right time and rate of application
of fertilizers and other farm inputs is hardly observed. Fertilizer
application is usually late and most of the time one time application
c) Solely Dependent from Rain
Water for Irrigation
Almost all sugarcane plantations
are dependent on rainfall for its water requirement. Hence time
of application of fertilizer is affected. Based on PATDAN reports,
irrigation can increase yield to as much as 100 MT cane per hectare,
which means an increase of 78.6% from the present national
average of 56 MT per hectare and 132.5% from 43 MT per
hectare for Bicol.
d) High Cost of Starting Capital
and Production Inputs
Sugarcane production requires
quite big amount ranging from P 31,000.00 to P 36,000.00 (please
refer to Annex Table 7) as starting capital for a hectare plantation.
Of these, 18% accounts for planting materials and 14% for fertilizer.
For the period 1995 to 1999, price of farm inputs especially
fertilizer continue to increase at a rate of 4.38% per annum.
(Refer to Annex Table 6)
e) Lack of Technology/Knowledge
and Facilities on Proper Land Preparation Technique and Method
Majority of sugarcane planters
especially small farmers still use animal-drawn disc plow in
land preparation such as plowing and harrowing. Very few farmers,
only big planters with machineries employ mechanical land preparation.
Available units are not sufficient to serve small farmers in
the neighboring area and not big enough to accommodate sub-soiler.
2. Production credit is not
available to producers especially to small farmers
Production loan for sugarcane
production is normally served to farmers by lending institutions
like Philippine National Bank, Land Bank of the Philippines and
rural banks. But as reported by BISUPLA and SRA, these banks
are no longer providing loans since 1994. This resulted from
poor loan repayments by farmers during the crop years 1993-94
and 1994-95. Many sugarcane plantations at that time were devastated
by super typhoon thus resulted to low sugar production and income.
At present, planters are relying
mainly to PENSUMIL offering a 60-80% financial assistance of
the total farm inputs. It started on crop year 1993-94 at an
interest of 24% per annum, now 18% compounded monthly for cooperatives
and farmers with at least 5 hectares area cultivated. Small
farmers with area below 5 hectares are advised to secure loans
from their respective cooperatives, which are funded also by
PENSUMIL. The cooperative in turn charge an additional service
charge of 0.5% per month or 30% per year, which is 150 % higher
than LBP interest charges of 12% per annum.
3. Poor condition and lack of
farm to market roads contribute to
delayed in delivery and lower recovery.
4. Technology transfer and proper technology application are
On Cane Milling Sector
1. Low Capacity Utilization
The local mill district facility
is operating below capacity. Over the past five years from 1992-93
to 1995-96, the mill average capacity utilization is only 49.02%compared
to national average of 60.21%. This can be attributed to insufficient
cane supply due to decreasing area planted that often results
in intermittent mill operations. SRA reports that aside from
the weekly shutdown for cleaning and repairs, the mill remains
idle for 17% of the time due to cited above reasons, which lowers
mills efficiency and correspondingly increases production cost.
Reasons such as conversion of sugarcane plantation to competing
crops, industrialization/ urbanization, disintegration/fragmentation
as a result of CARP implementation and environmental degradation
are among some cited causes of decreased in land area devoted
to sugarcane (PATDAN Report).
2. Low Mill Recovery/Efficiency
Records show that Philippines
mills, with an average over all recovery (OAR) of 79.01%, lag
behind their foreign counterparts when it comes to mill performance.
Compared with an international norm of 90% mechanical time efficiency
(MTE), the local mills' 86% is low (PATDAN Report).
In Bicol, specifically the
PENSUMIL district, the mill's records of performance show a decreasing
efficiency as evidenced by percent pol extraction that has decreased
to an average of 89% in crop year 1996-2001 compared to 93.91%
in crop year 1975-1980. Also, with the percent loss of pol
in molasses, bagasse, filter cake and unidentified source that
has almost doubled, from an average of 17.98% in crop year 1975-80
when it started, to an average of 33.04% in 1996-2001 indicates
that the mill has mechanical problem that needs immediate attention.
Other parameters like PS/TC and LKG/TC likewise show a decreasing
trend. PS/TC has decreased to an average of 0.96 in crop year
1996-2000 compared to 1.52, 1.14 and 1.23 in the years 1975-1980,
1981-1990 and 1991-1995, respectively. On the other hand, LKG/TC
has decreased to an average of 0.97 in crop year 1996-2000 from
an average of 1.90 in crop year 1975-80 (refer to Annex Table
8). However, these are not only affected by milling but majority
by the kind and quality of cane delivered for processing.