Where is the Ethanol

The country now has a very big ethanol demand to fill but where is the ethanol?

That’s the best question so far asked of the matter. Yeah, where, because there are none. The Filipino people have expected ethanol industries to mushroom all over the country the way they do in other parts of the world. In fact, I’ve been pondering over the same things since 2003 when I helped to organize the Bayawan Valley Farmers’ Organization in anticipation.

I remember I was doing fine as a construction worker way back in 02 until I saw Kompareng Joel G. Miranda about this thing called ethanol. No, he is not the same Mayor Joel G. Miranda of Santiago. His middle initial G stands for Granada.  Sometimes I wished the meeting never took place. I’ve been bugged by this ethanol thing!

Well, for those who do not know, Joel is that crazy old guy with crazy mercenary mentality who many people I’m sure never heard about. Imagine him as one bully in Diwalwal mountains where he made money managing one small-scale gold mining operation while the company he worked for went bankrupt in the end. Imagine him as been involved in dagdag bawas in some elections there in Mindanao. Imagine him among the Teroray tribe, has or should I say had one of them for his wife, fancying himself as the  warlord Toothpick reborn. And then there was the time he thought he could bully his way in Gensan’s fish port. Lucky he made it back to Manila in one piece! That’s when he talked me about this  Ethanol thing. You see, I like my Compadre very much but not always the many things that he brokered.

He was scouting for at least 10,000 hectares that could be cultivated to sugarcane – for absolute partnership with one interested foreign investment group. Ten thousand hectares to be converted to shares of stocks! The idea was for one corporation to own the plant [and facilities], likewise the farm that would guarantee supply of raw material to its own plant. This one proposed scheme is good.  In fact, I like the idea. I think it is advanced like, imagine a sugar mill eating up all the lands around it, or like one agro-corporation eating up the mill! But there are just many dead ends to it. The scheme is next to impossible if not insane under the present situation.

Nearest thing to that are Dole and Del Monte Philippines but they operate mostly on leased lands, or Hacienda Luisita Sugar mill in Tarlac that owns 6, ooo hectares. And they all developed over a considerable period of time and not overnight.

Presently, the nearest real thing there is for foreign investors is to find local partners for that plant. This is to conform to existing Philippine laws. Next would be to put up the plant. [Which is not simple matter since locating them can be complicated by politics, or something that needed connections in high places.] And when it is located, then that would be it – compete it out with other sugarcane millers.

The ups and downs of Dacongcogon mill is one interesting case. DPCMA was set-up in a territory that was fresh, or generally subsistence farming. DPCMA was a cooperative of farmers organized by the late Bishop Monsignor Antonio Fortich in partnership with the Gaston business group.  Financing  was then no problem. Land titles used to be clean. The Cooperative facilitated farmers with Philippine National Bank [PNB] and Development Bank of the Philippines [DBP]. The list of co-op members [my late old man was one of them] was long that in fact, just a quarter of them at their best were possible to maintain milling operations. But the mill had collapsed several times due to member-farmers’ run. Monsignor Fortich must have passed away a very disheartened old man at what administrators had done to his brainchild. [My baptismal certificate said it was him who poured holy water on me when I was cute and he was young parish priest of Binalbagan.]

Free Competition among Millers  and the Farming Sector

Cost of transport or proximity of farm to the sugarcane mills is one big consideration by farmers. Another major factor is Farmer-Miller sharing that varies from 65-35 to 70-30, and which can offset cost of transport. And then there’s the factor that always was the cause of farmers’ run – the efficiency of the mills - also viewed as millers’ trustworthiness. And such runs result to poor business if not collapse of mills in the end.

A farmer in Dacongcogon area, for example, either intentionally or by necessity, also milled with SONEDCO or sometimes went as far as BISCOM. Purity Sugar per Tonne Canes [PSTC] of 1.2 by one miller, 1.5 by another, and 1.6 in yet by another miller, all from the same farm-batch, spoke loud for the mills. And when analysis by millers [especially PSTC and molasses] has become questionable, the report from the Scale becomes questionable, too.

So, will putting up sugarcane mills encourage landowners and farmers to cultivate sugarcanes?  Yes, It will have the effect, or it will help encourage farmers. Sugarcane farming has always been the dream of every farmer in Negros Island. It’s a dream, an obsession actually, of every poor farmer to become a small planter or a big Haciendero someday. But sugarcane farming costs and there is no available financing program that supports it. Crop loan applies only to farmers who already have standing crop and with track record. Land titles for loan collateral to start everything with, are out of the question. In land reform, beneficiaries hold only certificates that are not valid instrument for loan. Clean titles free of encumbrances are rare if not extinct ever since the collapse of sugar in the 80s. In fact, strictly speaking, many landowners no longer own their lands.  What now as there seems to be one dead end here.

And then there is the problem of roads. We have large agricultural areas suitable for sugarcane agriculture. Sugarcane is suited to rolling terrains, which explains why 19th and early 20th century economic advances in Negros Island [Maao, La Carlota, La Castellana, Isabela, Payao, Himamaylan, Kabankalan] and the trails of the mestizo blood, were not in marshy or wetter plains until they were well drained.

The absence  of feeder or farm roads, or lack of them, is one of the reasons why the hinterlands have remained undeveloped or underdeveloped for cash crops. Many areas do not even have farm-to-market roads, much more good and stable ones. One planter I know in Bayawan Valley has lost P300, 000.00 worth of canes unmilled last [2007-08] season. Those over-aged canes are Katis or trash that are not worth transporting  to the mill this season. It was stupid to have operated without dependable and stable farm roads in the first place. [And this stupid speculator happened to be my brother. Weather did not cooperate according to his expectations!]

And finally there is the lack of hard motivation for producers – the farmers, which is something that they cannot do anything about – stable, good price for their produce. Trading sector has that in their hands. Millers, by definition, are part of the Producing sector. All millers [and some big planters] I know are engaged in commercial trading, too. Meanwhile, in places like Lucotan, Pingot, and yes, Bayawan Valley, it’s more of speculation than real agriculture in there on the part of the agricultural sector. It’s more of wait-and-see situation that I should say is generally sleepy-life-as-usual. There simply are people who have no place to go and nothing else to do but to farm if you call that serious farming.

How will we know that farmers are finally motivated? Well, I guess, more people will be going up there to cultivate, price of land will jump up, which right now is still considerably cheap; arriendo system as well as VOS will be down. And, there will always be moneyed people around because people always find ways when they are obsessed and sure about it. There won’t be much idle lands that people can see. But right now, even loan sharks are not optimistic about lending money in there. And about farm roads, gangs of farmers will build them with bare hands, hoes, plows, anything, as they have always done when they saw the need. Simple farmers, like their fathers before them, have ceased to  complain bother about roads.  Road equipments just come without being asked. And like the big signs that come with them, everything means  that it is election time once again.  Then the rains come. And, all repairs are gone until next election.  Don’t worry, there will be the gangs of farmers with bare hands, hoes, plows, anything.   But, surely someday,  maybe everybody can do better than all that!

Meantime, where is the Ethanol?