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Wednesday, August 20, 2014
A LESSON on economics is what we hear from our national and provincial policy-makers. I tend to side with hometown opinion.
Negros Occidental Board Member Patrick Lacson commented on the proposal of Senator Sergio Osmeña III that “refinements” are needed to pass the Sugarcane Act bill penned by 3rd District Representative Alfredo Abelardo “Albee” Benitez in the Lower House.
Finding convergences on the Osmeña version, my friend Patrick agreed that the Senator is “free to propose amendments for them to finalize their version of the bill.” Good point before he went for the jugular on the disagreement.
However, the board member said, “I just found it disturbing that he mentioned about refinements that were needed in line with the country’s international trade commitments and that he will be doing a consultation with the industry’s stakeholders.”
The process is as important as the process. And I have NGO colleagues who took part in these consultations. For participatory democracy outside the election process, no policy-maker can just set aside the opinions of industry stakeholders.
And for the substantive part, I support Patrick to say that it’s insulting for Osmeña to change the title of the bill from Sugarcane to Sugar. “I wish he understands why the author named it the Sugarcane Act. It is because the industry’s producers (farmers) produce sugarcane.”
Time and again, I mentioned that the new proposed policy is anchored on the fundamental policy of economics on forward and backward linkages. It might be detrimental to the cause of developing a provincial green economy that hinges on the diversification of economic sectors and subsectors.
A forward linkage is forged when stakeholders plunk investors in a particular economic sector that encourages investment in subsequent stages of production. A backward linkage is created when that sector encourages investment in facilities that enable the project to succeed.
Clear as mud so far? Let’s be concrete on the sugarcane industry. Argues Patrick on the Osmeña version, “For more than a century, the industry is stuck to raw and refined sugar.” Pretty straightforward.
Sugarcane planters plant sugarcane, the canestalks are harvested and delivered to the mills and processed as refined sugar. The long and short of it.
Development economists such as German-American Albert O. Hirschman note that most underdeveloped economies are primarily agrarian. Agriculture is typically at a primitive stage and hence possesses few linkages, as most output goes for consumption or exports. Therefore it is said that underdeveloped countries are lacking in interdependence and linkages.
Sugarcane to sugar then back to sugarcane. What diversification can we expect from such a circular loop. Give the system another 100 years and expect the same result of the rich remaining rich, and the poor remaining poor. Don’t even expect or think of creating a powerful middle class.
No, Senator Osmeña has to listen to the progressive Negrenses. Let him learn from the provincial environment code that focuses on building a provincial green economy.
Let us talk of sugarcane with a backward linkage on organic fertilizers and forward linkages to refined sugar linked to confectionaries with backward linkages to cacao. But also to biofuels, bioplastics, paper, vinegar even to sugarcane juice. Then there’s muscovado, now considered and packaged not as a poor man’s sugar but everyone’s healthy organic sweetener.
Patrick stressed that the sugarcane bill will not only get sufficient government funding for the forward and backward linkages as reflected in the much needed public investments on infrastructures and technology upgrade of the entire sugarcane industry. Right on! (firstname.lastname@example.org)
Published in the Sun.Star Bacolod newspaper on August 20, 2014.