Policy, purpose, and state program goals
- The State policy is to promote the competitiveness of the sugarcane industry and maximize utilization of sugarcane resources.
- The State policy is to improve the incomes of farmers and farm workers through improved productivity, product diversification, job generation, and increased efficiency of sugar mills.
- The State must pursue the following purposes: (a) establish productivity improvement programs; (b) provide infrastructure support; (c) enhance R&D; (d) provide human resource development and extension services; and (e) provide financial assistance to small farmers.
- The IRR directs program-building through institutionalization of productivity programs, support mechanisms, R&D, extension, human resource development, infrastructure, supply monitoring, classification of supply, VAT zero-rating on refined sugar for export, mandated appropriations, and the specific rule on CARP coverage—through the coordinated action of implementing bodies.
Key definitions for sugarcane programs
- A Block Farm is a consolidation of small sugarcane farms, including farms of agrarian reform beneficiaries, as one larger farm, with a minimum contiguous area of thirty (30) hectares within a two-kilometer maximum distance from each other.
- Common service facilities (CSF) are SRA-registered entities that provide technical, professional, marketing, or farm services such as plowing, planting, harvesting, hauling, and trucking to block farms and other sugarcane farms; they may be operated by block farms, mill district development councils, individual farmers, farmers’ associations or federations, or private corporations, and may also refer to common service centers or service providers.
- The Ethanol Producers Association of the Philippines (EPAP) is an SEC-registered, non-stock, non-profit association of bioethanol fuel producers in the Philippines.
- Farm-to-mill roads are roads connecting sugarcane farms to sugarcane processing facilities such as sugar mills, ethanol distilleries, biomass power plants, and other production facilities using sugarcane as raw material, with specifications that can handle truckloads of sugarcane.
- Institutionalized means to make or establish as a regular program of government by law.
- A Mill District is a contiguous area where a sugar mill or bioethanol distillery or any processing facility of sugarcane, together with all sugarcane plantations adherent thereto, are operating; a plantation is deemed adherent by virtue of sugarcane being delivered to a processing facility regardless of contract relation between the processing facility and plantation or landowner.
- A Mill District Development Council (MDDC) is an SEC or CDA-registered non-government organization composed among others of representatives from the sugar mill, distillery, planters associations in the district, PHILSURIN, and Sugar Regulatory Administration (SRA).
- PHILSUCOR is the government-owned and controlled corporation created under Presidential Decree No. 1890 with mandated functions including assistance in preparation, financing, and execution of sugar development/expansion programs, including borrowing and lending powers, as a government conduit.
- PHILSURIN is the SEC-registered non-stock, non-profit corporation created through efforts of the National Council of Sugar Producers as the private sector arm for sugarcane research, development, and extension.
- Raw Sugar is sugar whose sucrose content (dry state), by weight, corresponds to a polarimeter reading of less than 99.5°.
- Refined Sugar is sugar whose sucrose content (dry state), by weight, corresponds to a polarimeter reading of 99.5° and above.
- Small Sugarcane Farms are farms with an area of 5 hectares and less.
- Sugar Industry Foundation, Inc. (SIFI) is the foundation providing livelihood and skills training, medical and dental assistance, scholarships, and community development pursuant to Republic Act No. 6982.
- Sugar Master Plan Foundation, Inc. (SMPFI) recommends policy and programs for the viability and continued development of the sugarcane industry, funded from contributions of sugar producers.
- Sugar Regulatory Administration (SRA) is the government-owned and controlled corporation created under Executive Order No. 18, series of 1986; for this IRR, SRA refers to SRA Sugar Board.
Productivity improvement: block, support, mechanization
- The IRR institutionalizes productivity improvement programs to boost production of sugarcane and sugar and increase incomes of farmers and farm workers.
- The Block Farm Program consolidates small farms (including agrarian reform beneficiaries’ farms) into a block farm with a minimum area of thirty (30) hectares within a two-kilometer radius, aligning operations to ensure economies of scale, efficient use of machinery and workers, volume purchasing, financing advantages, and recognition by sugar mills and investors, while preserving ownership of each small farm with its landowner.
- The Block Farm Program includes institutional mechanisms: SRA guidelines for qualification and continued participation, farm management/technical assistance, monitoring of development and productivity, recommendation after six (6) years for cessation or graduation based on productivity/efficiency/profitability, and a certification system to access grants, low-interest financing, incentives, and ODA support.
- Sugar mills, bioethanol distilleries, and other sugar markets must provide market access priority to SRA-certified block farms, including the rule that they shall not refuse sugarcane deliveries from SRA-accredited block farms.
- For farms not eligible under the Block Farm Program, the Farm Support Program covers farms with aggregate areas beyond five (5) hectares but less than thirty (30) hectares, not members of any SRA-accredited block farm, managed by an individual farmer, farmers’ association or federation, or MDDC; farms of 5 hectares and less that are not members of any SRA-registered block farm are also eligible under the Farm Support Program.
- The Farm Support Program provides (i) socialized credit and (ii) farm management, technical assistance, and professional services, including:
- Socialized credit released directly to SRA and made available through LBP for acquisition of production inputs, farm machineries, and implements necessary for continuous production; SRA may use PHILSUCOR as conduit of LBP for loans; SRA, LBP, and PHILSUCOR must enter into a memorandum of agreement covering mechanics, terms and conditions, including interest and application requirements.
- Loans made available only to sugarcane farmers and service centers duly registered with the SRA, with the lender having a lien on the quedan until the crop loan is fully paid, and farmers not being granted another loan until fully paid, subject to exception for force majeure significant damages as determined by SRA.
- Simplified documentary requirements and an interest rate on socialized credit significantly lower than the prevailing market rate, plus an information campaign on mechanics and terms upon signing of the agreement with SRA.
- Farm management and professional services deployed through a deployment program of agricultural engineers, agriculturists, and farm technicians, coordinated among SRA, DA, DAR, DOLE, TESDA, SUCs, and other organizations, supported by a Human Resource Development Plan (HRDP) framework and related committees.
- The Farm Mechanization Program encourages and trains farmers, including block farms and agrarian reform beneficiary farms, to utilize appropriate machineries; SRA, DA, and DAR in partnership with LGUs must introduce/expand mechanization use, formulate mechanization programs at mill district and block farm levels, and support the establishment and maintenance of machinery and equipment service centers, emphasizing services for farms unable to purchase or maintain their own machinery.
- LBP manages the socialized credit facility under both the Farm Support Program and Farm Mechanization Program, and SRA, DA, DAR, and LBP must issue guidelines on administration and lending.
Research and extension services governance
- The IRR requires SRA, in coordination with DOST and relevant state universities and government R&D institutions and the private sector, to intensify research on:
- high-yielding or flood-resistant varieties;
- pest control and prevention;
- latest farming, milling, refining, and biomass co-generation technologies;
- soil analysis and fertility mapping;
- weather monitoring and climate change adaptation measures;
- sugar and sweetener consumption; and
- other viable products derived from sugarcane.
- DA and DOST must assist SRA to improve crop forecasting and crop monitoring activities or programs.
- A Research, Development and Extension Services (R, D & E) Committee must be created, chaired by an SRA Board member, to recommend projects and priorities for research and development undertaken or prioritized by SRA aligned with the sugarcane roadmap.
- The R, D & E Committee includes representatives from specific agencies and entities such as DA-BAR, DA-PHILMECH, DOST-PAG-ASA, DOST-PCAARRD, DOST-PCIEERD, UPLB, CHED, PHILSURIN, and SRA-registered industry associations and federations, including MDDC representatives.
- Extension services in sugar districts must be provided by SRA and MDDCs in addition to services by DA, DAR, SUCs, and private/non-government organizations.
- Extension services must include technical assistance and advice, tests, propagation, dissemination of high-yielding varieties, and operation of demonstration farms.
- MDDCs may develop linkages with non-government organizations, people’s organizations, and LGUs, and may secure funding from private sources for extension services.
- MDDCs must be responsible for formulating the development plan of the mill district in line with objectives or targets of the SRA Roadmap, and SRA extension personnel must assist in preparing the mill district development plan.
- An MDDP Committee must be created and chaired by an SRA Board member to develop guidelines for funding, prioritization, and implementation of MDDC development plans and to review programs/projects/activities every five (5) years (or earlier when necessary) for recommendations to amend or modify the SRA Roadmap.
Human resources development and HRDP master plan
- The IRR requires all stakeholders to contribute to development of sustainable industry human resources.
- DOLE, in collaboration with SRA, Commission on Higher Education, TESDA, PRC, and private sector, must formulate and implement a Human Resource Development (HRD) Master Plan for the sugarcane industry.
- The HRD Master Plan must include capacity building and skills training, institutional strengthening of industry workers, small farmers, agrarian reform beneficiaries, and their organizations to contribute to productivity and competitiveness.
- The HRD Master Plan must include a scholarship program for underprivileged but deserving college and post graduate students in relevant disciplines in SUCs, and vocational courses/skills development for farmers and farm technicians and skilled workers in mills, refineries, distilleries, and biomass power plants.
- The scholarship program must prioritize dependents of sugarcane industry farmers and workers.
- The HRD Master Plan must include capability training or attendance to local or international trainings and seminars for farmers, technicians, and SRA technical personnel on the latest technologies related to sugarcane farming and production of sugar and sugarcane-derived products.
- Capability training must be conducted at least once every crop year starting in the crop year after effectivity of this IRR, and attendance to local/international trainings and seminars must be endorsed by the HRDP Committee for approval; international trainings and seminars must be funded from general appropriations of SRA.
- The HRD Master Plan must include formulation and implementation of training regulations for technical vocational education and training by TESDA, with SRA assisting TESDA in formulation and implementation.
- The HRD Master Plan must include upgrading of facilities, faculty development, and strengthening on-the-job training programs of agri-based higher education institutions, with proposals submitted by state universities and agri-based higher education institutions to the HRDP Committee for funding and a commitment requirement that beneficiaries/partners implement the program at least on a five (5) year term.
Infrastructure support and program committee
- The IRR requires transport infrastructure, farm-to-mill roads, and irrigation facilities to facilitate transport of sugarcane to mills and distilleries, enhance marketing and export of sugar and other products derived from sugarcane, and complement productivity improvement.
- NEDA, DOTC, DPWH, and PPA must include in their annual Development Plans and Priority Investment Programs the immediate construction and/or improvement of existing trans-loading ports for export or coast-wide transport of sugar and sugarcane-derived products in key sugarcane producing provinces.
- The SRA must submit to NEDA, DOTC, DPWH, and PPA a priority list of trans-loading ports within six (6) months from the start of effectivity of the Act.
- NEDA, DA, DPWH, and concerned LGUs must include in their annual Priority Investment Program the immediate construction and/or rehabilitation of farm-to-mill roads in key sugarcane producing provinces, and SRA must submit a Farm-to-Mill Road Master Plan and priority farm-to-mill roads at the mill district level within six (6) months from start of effectivity of the Act.
- NIA, Bureau of Soils and Water Management, and concerned LGUs in coordination with SRA must construct appropriate, efficient, and cost-effective irrigation facilities, including pump and other pressurized irrigation systems, rain capture, and water impounding facilities in block farms and other sugarcane farms.
- SRA must submit to the above agencies a list of priority sugarcane areas within six (6) months from start of effectivity of the Act, and DA and NIA must include in their annual budget items for construction and rehabilitation of irrigation and related facilities.
- To promote conservation and mill participation, the utilization for irrigation of wastewater discharge of mills, refineries, or distilleries meeting DA specifications on safe reuse is considered “reuse” and therefore exempt from wastewater charges under the system of Section 13 of Republic Act No. 9275.
- The IRR creates an Infrastructure Program (IP) Committee, chaired by an SRA Board member, composed of representatives from NEDA, DPWH, PPA, DA, NIA, Bureau of Soils and Water Management, an SRA-registered millers association representative, an SRA-registered refiners association representative, a sugarcane farmers’ federation representative, a sugarcane planter representative from SMPFI, and block farm representatives from Luzon, Visayas, and Mindanao.
- The IP Committee prepares project proposals and must include priority-list planning mechanisms for farm-to-mill roads:
- First priority roads connected to national highways or arterial roads leading to block farms, small farms, and expansion areas with at least 100 hectares of sugarcane plantations validated by MDDCs or planters organizations.
- Second priority roads connected to national highways or arterial roads leading to at least 100 hectares of sugarcane farms validated by MDDCs or planters organizations.
Sugar supply monitoring, registration, and regulation
- SRA must establish a supply chain monitoring system from sugarcane to sugar at retail level to ensure sufficiency and safety of sugar.
- SRA must be the lead agency for food safety regulation on all forms and classifications of sugar derived from sugarcane.
- SRA is the sole competent authority to formulate and provide the technical definition of all forms of sugar derived from sugarcane.
- Entities mandated to register with SRA for accurate determination of supply and for planning/policy include:
- sugarcane farmers, farmers’ associations/federations, mills/mills associations, sugarcane consolidators, and muscovado producers;
- distilleries using molasses, sugar, or sugarcane as ingredient for alcohol, with importers and consignees of imported molasses regularly reporting the volume of molasses imported;
- international and domestic sugar traders including wholesale traders and repackers, muscovado and molasses traders, and custom bonded warehouses (CBW) of food processors importing sugar for re-export, with requirements for traders and CBW food processors to submit lists of all warehouses;
- warehouses of sugar and business establishments manufacturing or selling bags or sacks for packing sugar; and
- cane hauling and harvesting service providers.
- SRA must provide forms and ensure registration is least possible cost to stakeholders, particularly agrarian reform beneficiaries.
- Failure to register when directed in writing subjects the entity to penalties imposed by SRA.
- SRA must issue a Sugar Order providing registration guidelines and requirements and must develop and maintain a sugarcane industry database administered and updated by SRA, strengthening its management information system capability and providing funds for development of information systems and databases.
- For food sufficiency and safety purposes, DTI and LGUs must be requested to share their databases of business permits and LGU permits issued to covered entities; SRA must provide funds for an initial survey of establishments generated by those databases up to barangay level, consistent with COA accounting rules and regulations.
Classification of imported sugar for regulatory release
- SRA must classify imported sugar according to its appropriate classification when imported at a time when domestic production is sufficient to meet domestic sugar requirements.
- The Bureau of Customs (BOC) must require importers or consignees to secure from SRA the classification of imported sugar prior to its release.
Governance committees and membership rules
- Block Farm Program governance includes:
- the Block Farm Program Committee composed of an SRA Board member as Chairperson, representatives from DAR and DA, representatives from established block farms in Luzon, Visayas, and Mindanao, representatives from SRA-registered sugar millers association and refiners association, a representative from SRA-registered sugarcane farmers’ federation, and a sugarcane planter representative from SMPFI.
- an SRA technical working group (TWG) headed by the SRA focal person for block farms.
- committee members from other agencies and stakeholders receive no per diems.
- Farm Support Program includes an HRDP Committee chaired by SRA and co-chaired by DOLE, with multi-sector representation and a TWG made up of designated SRA personnel; members and representatives receive no per diems.
- Farm Mechanization Program governance includes:
- a Farm Mechanization (FM) Committee chaired by an SRA Board member, with specified representatives from government agencies, LGUs, UPLB, and SRA-registered associations and MDDCs, supported by an SRA TWG; members receive no per diems.
- Infrastructure Program governance includes the IP Committee supported by an SRA technical working group headed by an SRA Manager of the Policy and Planning Department, with no per diems for committee members and representatives.
- Research and Development governance includes the R, D & E Committee chaired by an SRA Board member and assisted by an SRA TWG; members and representatives receive no per diems.
- Extension governance includes the MDDP Committee chaired by an SRA Board member and assisted by an SRA TWG; members and representatives receive no per diems.