Local hog raisers write Duterte

LOCAL hog raisers made another push to block the government’s twin proposal to lower pork tariffs and hike minimum access volume (MAV) by writing directly to President Duterte.

The latest letter of the Pork Producer Federation of the Philippines Inc. (ProPork) to Duterte on Tuesday comes less than two weeks before the Chief Executive can exercise his authority to lower tariff rates.

ProPork wrote to Duterte to express their “grave concern” regarding the twin proposal of the Department of Agriculture to reduce the tariff on pork imports to as low as 5 percent, and increase the MAV to 400,000 metric tons (MT) from current 54,000 MT.

“In this regard and on behalf of the country’s pork sector, we would like to note our strongest  opposition to the tariff reduction and expansion of the MAV on pork importation,” ProPork said in the letter.

ProPork argued that lowering the tariff on pork imports would result in foregone government revenue of about P13.95 billion which could be used to bankroll interventions to revive the domestic hog industry against African swine fever (ASF).

At a P99 per kilogram price tag for imported pork pigue, the government will collect P15.94 billion in tariff revenues if present rates would be kept, according to ProPork’s analysis. However, the government would only be able to collect P1.99 billion from pork imports if the rates are reduced to 5 percent, the group added.

“In addition, data shows that even with imports supposedly coming in cheaper, the importers never pass on the cheap price to the consumers,” it said.

“So where is the supposed advantage to consumers? This move will only kill the local pork producers,” it added.

ProPork also questioned the proposed increase of the current MAV from 54,000 MT to 400,000 MT, arguing that demand for pork has plunged in the past year by 30 percent.

“Where did the DA come up with 400,000 MT? As per our computation and USDA data, our shortage will only be at 224,000 MT,” it said.

“Despite a strong downturn in 2020 pork production, demand for pork have declined nationwide by 30 percent, and in turn, also reduced demand for pork imports,” it added.

Citing data from the United States Department of Agriculture-Foreign Agricultural Service, ProPork noted that per capita consumption of pork will continue to decline this year due to high prevailing prices coupled by the change in consumer spending due to Covid-19 pandemic.

ProPork admitted that there is a domestic supply shortfall due to implications of ASF-related actions. Furthermore, the group pointed out that they accept the need for importation at this time, but pointed out that 400,000 MT is “too big” and would only benefit importers.

“Giving importers a break with lower tariff has no positive outcome for the government, our local industry and even the consumers because  pork is still sold at high prices,” it said.

ProPork also proposed that tariffs collected from pork imports should be earmarked to help the local hog industry. ProPork added that an indemnification system of P10,000 per head of pig should be established by the government.

“The money should be used to help us repopulate. Many of us have had to come up with our own money to repopulate, only to be hit by ASF again, which meant killing off our pigs again,” it said.

Allied industries

ProPork also called Duterte’s attention to the possibility that a further decline in the domestic pork industry may affect its allied industries such as poultry, corn, and coconut farmers.

If such domino effect happens, then it will likely “derail the country’s agricultural development for years to come,” the group said.

As soon as Congress goes into recess on March 27, Duterte can issue an executive order (EO) to modify tariff rates on pork imports, based on the country’s existing laws.

The BusinessMirror first broke the story that the Cabinet-level Committee on Tariff and Related Matters (CTRM) will recommend to Duterte the reduction of pork tariffs to 5 percent for MAV and 15 percent for outside MAV for three months.

Afterwards, the rates would increase to 10 percent (MAV) and 20 percent (outside MAV), respectively, for the duration of nine months.

At present, pork imports within MAV are slapped with 30-percent tariff while those outside MAV are levied with 40 percent tariff. 

Image credits: PNA/Redjie Melvic Cawis