Sugaronline Editorial - Driving machines By Meghan Sapp

Published: 03/02/2018, 1:37:00 PM

The Philippines need to mechanise immediately or risk their own survival.



The Philippines need to mechanise immediately or risk their own survival.

 


Mechanisation in the sugarcane industry is a sensitive subject, typically brought about by environmental policy—as was the case in Brazil—in an effort to eliminate cane burning. As good for reducing air pollution as it may be, it’s also a topic that can create panic for canecutters fearful of losing their jobs and not having the literacy or skills to learn to operate harvesting machinery, or skill up to find a job outside of the sugar industry.

In the Philippines, mechanisation is being forced from a different direction, however. Instead of the industry moving away from manual harvesting on its own, canecutters are instead running towards better paying jobs in the construction industry thanks to a mega US$36 billion nationwide infrastructure plan. That plan is forcing mills to look at how to make up for the sudden lack of available workers, and in a hurry.

Although the result may be the same—a more efficient industry with reduced production costs—the Philippines may have a harder time adapting because of the pace required to invest in mechanisation.

In Brazil, the policy was introduced and mills had the better part of a decade to invest in mechanisation while UNICA teamed with local partners to skill up canecutters for when fewer jobs would be available. Financing was made available as was government support in the training and overall transition. In the Philippines, however, the government is instead supporting the infrastructure program that is creating the labour drain. It’s so attractive that they’re leaving in droves with no transition period that will allow mills to invest in machinery or in training to make sure they keep crushing as they have done traditionally.

The Sugar Regulatory Administration is rightly nervous, taking the threat seriously and heading down to impacted regions to take a look, especially, Mindanao where cane areas have been reduced enough to cause challenges that will be exacerbated by the lack of available labour. The national budget for sugarcane infrastructure and investment was cut in half for this year to just over US$19 million, ironically due to under-spending in previous years.

Now it’s clear that those funds will be needed and in a hurry, to buy machines and to train operators. The SRA already had planned its first farming mechanisation expo in Bacolod in April in an attempt to draw investment and technology. For 2018/19, however, it may be a case of too little, too late and leave a lot of mills in dire straights with standing cane and higher production costs due to underutilization.

In the meantime, the SRA is going to need to go back to the Duterte administration and ask for its budget back, and likely more in the way of soft financing for mills to get their houses in order quickly. In the end, Duterte may find that his infrastructure plan bites him in the rear when the big investment drive is finished and those construction workers suddenly don’t have their former canecutting jobs to go back to. The sugar industry will have innovated and mechanised while he wasn’t looking.

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