The Philippine sugar sector is one of the nation’s firmest economic pillars mainly because of its historical and promising yield. However, like any other industry, sugar isn’t always on top as issues and other external factors have plagued and scarred the sector’s once-spotless record.
One of the biggest issues that continues to ruin the name of the sugar industry is smuggling. Throughout the years, smuggling has posed a direct challenge for concerned agencies and calls for immediate intervention.
The Factors Behind Smuggling
The still-low sugar farmgate prices unveil experts’ predicaments amidst the country’s low domestic sugar production. These inferences lead them to smuggle sugar or items illegally entering the Philippine borders and consumer market.
Here are prominent factors that can foster this unwanted act:
1. Variations in Pricing
A lower sugar price on the international market serves as a negative invitation to import. With the recognizable differences between local and imported sugar, smugglers find the opportunity to transport products from foreign lands and escape duties, thereby capitalizing on a lower cost. This action jeopardizes local sugar producers, as a compromise to compete with smuggled sugar is on the line.
2. Corruption
Customs and regulating agencies are the first lines of defense against the entry of smuggled items. This setup can also suggest that the illegal importation of foreign sugar can be due to corruption in these offices. Penetrants initiate under-the-table transactions to buy boundaries out, avoid gross liabilities and find a way to the local market where cheaper sugar converts more.
3. Inefficient Enforcement
Laws and regulations are in place to combat smuggling and prevent its subsequent effects on the local industry. However, lenient enforcement dampens these rules’ impositions. A classic example is the many unmonitored borders that accommodate import dealers and allow them to trade with the local market.
Impacts on the Market
The entry of smuggled sugar to the Philippine borders has two significant effects: reduced income and unstable prices.
When illegally imported sugar penetrates the market, local producers unjustly drag their prices down to compete with the smuggled varieties – even when this means selling their produce below production cost. Consequently, farmers, millers and even the government suffer operating losses from these illegal activities. Producers’ income is no longer sufficient to sustain them. In addition, uncollected taxes and duties supposedly intended to improve the sector could not materialize.
Government Responses
The government has the power to control its jurisdictions, including the authority to secure its borders against those who are illegally importing sugar into the country. However, as this essential move requires immense implementation and alignment with all concerned agencies, it needs stringent cooperation with customs, stakeholders and other authorities.
To support the tightening of the nation’s perimeters against smuggling, the government can boost the domestic sugar supply by improving sugar production machinery, enhancing the supply chain and initiating future investments to modernize the industry’s processes. This way, local sugar may no longer compete with imported varieties, especially the smuggled ones.
Smuggling doesn’t only affect the Philippine sugar industry, but other nations as well. For a country with rich vegetation, it’s shameful how our local produce gets overshadowed by imports and smuggling – and we don’t tolerate these. With the government working with all affected sectors, we can push through with more stringent regulations and implementation. Plus, if our farmers and producers get the support they need, they’ll no longer have to fight for their livelihoods, and domestic sugar will regain market competitiveness.
