Cane Points: HFCS Importation and its Impact

If there's one single event which characterizes Crop Year 2016-2017, it should be the massive and unabated importation of high fructose corn syrup (HFCS).

Beverage companies and other industrial users have been importing HFCS several years back, but not in the volume which flooded the country in 2015 and 2016. Records from the Bureau of Customs reveal that 53,405 metric tons of HFCS were brought into the country in 2012. The next year, the volume declined to only 32,199 mt.

However, in 2014, HFCS importation surged to 213,185 mt and to 247,204 mt in 2015. In 2016, HFCS imports hit a record high of 373,138 mt!

At the start of Crop Year 2016-2017, sugar prices were at P1,800 per bag. By December, it dropped to about P1,300 per bag, the level at which it lingered until the end of the crop year.

Alarm bells started ringing in Sugarlandia. Leaders of the Sugar Alliance of the Philippines condemned the importation and set its sights on Coca-Cola, the biggest importer and user of HFCS in its widely popular beverages.

The Sugar Alliance had harsh words for Coca-Cola, after the firm reportedly reneged on its earlier agreement with sugar leaders that it will moderate its use of HFCS and, instead, buy a higher volume of locally produced sugar.

On February 16, through the help of Bukidnon Gov. Joe Zubiri, sugar industry leaders and SRA chief Anna Paner met with Pres. Rodrigo Duterte in Davao City to seek his help on the HFCS issue which is killing the sugar industry.

The President ordered Paner to help the industry, and this led to the issuance of Sugar Order No. 3, regulating the importation and use of HFCS.

Coke wasted no time challenging the order in a regional trial court in Quezon City. Coke sought a Temporary Restraining Order and Preliminary Injunction against the implementation of SO#3 and also petitioned the court to declare the order as unconstitutional.

Named as respondents in the case were Paner, Agriculture Secretary Manny Pi?ol and Customs Commissioner Nick Faeldon. The Sugar Alliance entered its intervention as stakeholders in the case. This was the start of the industry very costly legal battle against a multi-national with billions of pesos in resources.

Aside from the court battle, the Sugar Alliance, supported by marginal sugarcane farmers and farm workers, staged a protest rally which filled the entire length of the highway fronting Coke's bottling plant in Mansilingan, Bacolod City.

Protestors burned an effigy of Manny Pi?ol, depicted as a bottle of Coke with his as the cap, to condemn what was perceived as his bias against small farmers in favor of a foreign transnational corporation.

In that rally, the boycott against Coke products was launched. The provincial government took the lead, banning Coke products from the world-famous Panaad Festival. Other local government units followed suit, even as local businesses and restaurants took out Coke products from their shelves.

Meanwhile, a federation of agrarian reform beneficiaries associations in Central Negros led by Aaron Sorbito and Ranie Lava wrote the President, copy furnished the Cabinet Secretary, SRA chief and the secretaries of Agriculture, Finance and Trade and Industry, explaining that the new face of the sugar industry is the small ARBs.

They pointed out that the days of the sugar barons and hacienderos are long gone. With the three decades implementation of CARP, large landholdings were mostly parcelized and distributed to farm workers. Owing to their number, these new landowners, the small farmers, are the new face of the sugar industry.

They cited that, five years ago, 85% of roughly 90,000 sugar farmers cultivate farms of ten hectares or less; 75% (mostly ARBs) cultivate five hectares or less. With continued CARP implementation, their number has substantially increased.

Apparently, this portrayal of the industry as mostly composed of marginal farmers swayed national government officials to protect the industry. A Senate inquiry was held and a congressional hearing was also conducted on the need to regulate HFCS.

Coke's petition for a temporary restraining order was denied by the court and its motion for reconsideration was likewise rebuffed. Coke took a new tact, withdrawing the petition for preliminary injunction so that the court can immediately delve into the issue of the constitutionality of Sugar Order No. 3.

Eventually, Coke regained its senses and withdrew the case. The court dismissed the case with prejudice, precluding Coke from filing another case on the same grounds.

Though Coke lost the case, the boycott on its products still stands. Hopefully, Coke will realize that supporting the sugar industry, by buying a large volume of its sweetener requirements from local farmers, will redound to more goodwill and better business for its Philippine operations.

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