SEARCA Study Shows CARP Will Boost Negros Sugar Output

  • 28 September 2015, Monday

Source: Manila Bulletin
17 Sep 2015

Bacolod City -   The Comprehensive Agrarian Reform Program (CARP) of the government will not kill the sugar industry but in fact increase the output through improved efficiency of farmers.

This was found out by the  team of researchers from the Department of Agricultural Economics of the College of Economics and Management of the University of the Philippines at Los Banos, Laguna (UPLB-CEM), commissioned by the  Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), who conducted the study on the total factor productivity (TFP) of the agrarian reform beneficiaries (ARBs) in the sugar producing provinces.

They also  found out that the ARBs only need sustained and intensified support services.

This is contrary to the belief of Negros Occidental landowners.  This argument has been advanced by a team of experts that analyzed the sugar industry’s total factor productivity (TFP), led by Prof. Corazon T. Aragon of the Department of Agricultural Economics of the College of Economics and Management of the University of the Philippines at Los Banos (UPLB-CEM), with Nora D. M. Carambas, Rizza T. Andres, Kristine G. Roxas, all of UPLB-CEM, and Dina P. Fernandez, chief of the Extension Division of the Sugar Regulatory Administration (SRA).

Their study also showed that the , “Total Factor Productivity Growth in the Philippine Coconut and Sugarcane Sub-sectors,” of the  Comprehensive Agrarian Reform Program (CARP) would not be an impediment to higher output and improved farm efficiency.

According to Dr. Gil C. Saguiguit, Jr, executive director of SEARCA, the monograph’s findings are crucial in crafting policy for the sugar industry and in boosting the efficiency of the hundreds of thousands of farmers working in the cane fields.

The Technical Efficiency Change (TEC) of farmers covered by the study,   increased to 0.82 in 2007, which meant that they were only producing 82 percent of the maximum production level and could achieve more if they are trained and abide by good agricultural practices.

However, Aragon said,  giving land to the landless farmers will not be a cure-all, and  continuous implementation of the agrarian reform program may be pursued provided that support services such as training (e.g., developing the technical and managerial skills of new landowners who used to be landless workers in sugarcane estates) and credit are well in place.”

Aragon further said,  “The Sugar Regulatory Administration (SRA) should intensify its delivery of extension and support services not only to the small farmers who lack technical know-how and logistics but also to large farmers as well. Large farmers, found to be less technically efficient, should be informed about the optimal use of inputs. New farmers and farm managers should be the SRA’s target clientele for training. Moreover, soil testing must be included among the support services offered by the SRA to guide farmers in applying the optimal amount of fertilizers and soil ameliorants.”

She also called for the continued propagation and dispersal of high-yielding sugarcane varieties in cooperation with the private sector.

The SRA should see to it that the newly-released varieties actually reach the farmers within the shortest possible time to minimize adoption lag and maximize economic benefits from research and development (R&D.) This could be done through massive propagation of planting materials in cooperation with the private sector,” Aragon stressed.

The sugar industry is a significant sub-sector since it provides direct employment to 600,000 farmers and 25,000 workers in the sugar mills and refineries, with about 5 million people also indirectly employed.

Reportedly, in Negros Occidental,  some  ARBs tend to sell their acquired lands through CARP for lack of resources like planting materials and fertilizers. But there are ARBs who are successful in tilling the acquired land according to the Department of Agrarian Reform (DAR).

In the whole country, SEARCA  study shows that the  total export earnings from raw sugar and sugar products were $128.696 million in 2008, when its share of the gross value added in agriculture was 2.6 percent.

Production inched up 2.1 percent from 1990, when the output was 20.4999 million metric tons (MMT), to 2008, when the yield was 26.601 MMT.

Output actually slumped during the 1990s but bounced back from 2000, when the SRA released new high-yielding varieties that were dispersed by Mill District Development Councils (MDDCs.)

In 2008, a total of 397,991 hectares, or 3.4 percent of the total arable land, were devoted to sugar cultivation but the yield at 66.84 MT per hectare lagged behind Brazil at 79.71 MT/ha, India at 68.88 MT/ha and China at 73.11 MT/ha.

The team also found out that land and labor were the principal production inputs, with land having an output elasticity of 0.4824, meaning that for a 10 percent increase in land area, there would be a 4.824 percent growth of yield.

A 10 percent increase in labor would also result in a 5.427 percent gain in the yield of sugar.

Aragon said the results from the analysis showed that education and land tenure were significant factors as regards output, with higher educational attainment correlated with more efficient operations and the better application of inputs.

Curiously, leasees were more efficient than part-owners and full owners of sugar farms, with leasees at 0.93 and part-owners at 0.78 and full owners at only 0.75, an indication that leasees have to maximize output since they pay ground rent.