Amid a looming power and water shortage, as well as the prevailing scarcity of sugar, the government has taken various steps to address possible disruptions in utilities and commoditiessupplies, officials said Tuesday.

Malacañang said the government is earmarking an initial P1.7 billion to protect the agriculture sector from the ill effects of the El Nino phenomenon amid concerns that a severe drought might cause more than P10 billion in production losses.

The package of intervention measures was proposed by the Department of Agriculture after it was designated to lead a task force reactivated by President Arroyo to combat the El Niño dry spell during a Cabinet meeting in Malacañang.

Conrado Limcaoco, officer-in-charge of the Office of the Press Secretary, said the President wanted the task force to come up with a comprehensive action plan to ease the impact of the drought on the people and the economy.

Also included in the government’s plan against El Niño is a massive water conservation campaign in households, offices, and commercial establishments in the next six months.

Agriculture Undersecretary Bernie Fondevilla said the country could expect a “moderate” El Nino this year which may affect large plantations of rice, corn, fisheries, and high value crops such as sugar cane and vegetables in vulnerable parts of the country.

He said the government anticipates close to P10 billion in agricultural losses if the El Nino is mild.

“If the effect is severe, which is unlikely, then it would be greater,” the agriculture official said.

From the proposed P1.7 billion fund to mitigate El Nino, Fondevilla said the agriculture department recommended immediate cloud seeding in corn and rice areas, water management especially in dams, distribution of shallow tube wells, as well as seed and fertilizer support.

These measures, he said, sought to raise crop production and farmers’ income even during El Niño, an abnormal weather condition characterized by the lack of rainfall.

Fondevilla said 543,844 hectares of rice, 273,411.6 hectares of corn, 16,992 hectares of fisheries and 3.07 million metric tons of vegetables are vulnerable to the effects of El Niño in the country.

Asked if the drought could lead to water and food crisis, Limcaoco said such scenario is unlikely if the government interventions planned yielded the desired effects.

Limcaoco also assured there was still no need for water rationing due to El Nino and appealed anew to the public to conserve the vital resource.

The agriculture department earlier identified areas considered highly vulnerable to El Niño, namely Ilocos Sur, Ilocos Norte, La Union, Pangasinan, Cagayan, Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales, Cavite, Rizal, Occidental Mindoro, Palawan, Capiz, Iloilo, Negros Occidental, Misamis Oriental, Zamboanga City, Sarangani and South Cotabato. Abra, Apayao, Benguet, Ifugao, Mt. Province, Isabela, Nueva Vizcaya, Quirino, Batangas, Laguna, Quezon, Romblon, Sorsogon, Aklan, Antique, Bohol, Samar, Zamboanga Norte, Zamboanga Sibugay, Zamboanga Sur, Bukidnon, Davao Oriental, Davao Sur, and Davao City are considered as moderately vulnerable to El Niño.

The Department of Agriculture is also taking more consumer-friendly steps to immediately beef up the domestic buffer stocks of sugar amid a recent price spike resulting from a global supply and price crunch.

The measures lined up by the DA through the Sugar Regulatory Administration and the National Food Authority are topped by a directive by Agriculture Secretary Arthur Yap for the NFA to make available at once 150,000 kilos from the Philippine Sugar Millers Association members to be made available to poor consumers via the Tindahan Natin outlets in Metro Manila.

Yap and other agriculture officials also reached an agreement with local traders to fast-track a plan to import 150,000 MT of sugar to stabilize the price of the commodity in the domestic market.

At the same time, Yap endorsed to Trade and Industry Secretary Peter Favila the recommendation of SRA Administrator Rafael Coscolluela for the adoption of a suggested retail price (SRP) on sugar.

“The DA recommends that the SRP for refined sugar be increased to P52 per kilo for the last week of January 2010,” said Yap in a January 25 letter to Favila.

“In as much as mill gate prices change every week—and considering the three-week lag time for these prices to be reflected in the retail market—a weekly suggested reference price is recommended for refined sugar.”

Yap directed SRA to require sugar traders to liquidate their sugar release orders to make sure that “sugar stocks withdrawn from the mills get to the intended beneficiaries in the local market instead of being smuggled out in the face of spiraling prices abroad arising from tightening supplies.”

He explained that rocketing production expenses and bad weather have combined to cut sugar yields over the past two years, leading to a global shortage of an estimated nine million MT that has exerted upward pressure on prices in the international market.

Accredited traders were originally set to bring in their imports by May yet, but the tightening supply and the ensuing price spiral have prompted Yap and other DA officials to let them bring in deliveries months ahead of schedule.

“We have asked accredited sugar importers to acquire ahead of schedule a volume ranging from 60,000 MT to 150,000 MT under the NFA’s TES (tax expenditure subsidy), which provides for a zero import tariff, as a way to stabilize the supply and prices of this commodity in the domestic market,” Yap said.

The Bureau of Agricultural Statistics has reported that, as of January 23, the prevailing prices are P52 for a kilo of refined sugar and P44 for raw or brown sugar.

Meanwhile, energy officials were asked to give assurance for a sufficient power supply during the elections in May amid brownouts that hit some areas in Luzon last Monday.

The Bagong Alyansang Makabayan (Bayan) particularly urged the Department of Energy, National Power Corporation, and the National Grid Corporation to assure adequate power as it expressed fears the rotating brownouts would continue in the coming days.

The National Grid Corp. of the Philippines has put the whole Luzon Grid on red alert due to a power generation deficiency on the island after one of the Sual power plant's units in Pangasinan conked out.

“The scenario of having rotating brownouts or power outages should definitely be avoided. Our energy officials must ensure adequate power supply and back-up power as a contingency measure,” Bayan secretary-general Renato Reyes Jr. said.

“It is bad enough that there are already many questions in the automated elections, we don’t need to have power outages further complicating the matter,” Reyes added. (With a report from Ellalyn De Vera)