Pork producers slam EO for extending tariffs

MANILA, Philippines — A government decision to extend reduced tariffs on pork imports until the end of the year will not lower meat prices and may even delay the recovery of the country’s pork industry against African swine fever (ASF), according to the Phils Pork Producers Federation. Inc.

“The entire pork industry is saddened by the issuance of new Executive Order (EO 171) by President Duterte extending low tariffs for pork imports. This will set back efforts to revive the pork industry, as it will certainly affect the confidence of the sector to reinvest to increase production,” Pork Producers President Rolando Tambago told The STAR in a Viber message.

That sentiment was also echoed by National Swine Farmers Federation Inc. President Chester Warren Tan, who said the new EO could discourage hog farmers from getting into production.

EO 171, signed by President Duterte on May 21, extends reduced pork tariffs under EO 134, which was signed last year, aimed at lowering prices and stabilizing supply pork in the country.

EO 134 reduced most favored nation (MFN) tariff rates for pork imports under quota or those below minimum access volume (MAV) to 10% for three months and increased 15% for the remaining months. This is less than the initial rate of 30%.

On the other hand, over-quota pork imports were subject to a customs duty of 20% for the first three months, which was increased to 25% for the remaining months. This is less than the initial rate of 40%.

Under EO 171, the 15% in-quota and 25% out-of-quota pork tariff rates will be extended until December 31.

“While we understand the need for more affordable retail pork prices for consumers, the previous EO 134, which was released in May last year, failed to deliver on its promise of cheaper pork. I am convinced that consumers can expect the same result with this new HE. The government will lose huge potential tax revenue due to tariff reductions without tangible benefits for consumers,” Tambago said.

Based on the latest market monitors from the Department of Agriculture (DA), the prevailing price of pork ham or kasim in Metro Manila markets was P340 per kilo on Friday, while one kilo of pork bell or liempo was 390 P.

The current prices are higher than the price of 350 pesos per kilo of kasim and 380 pesos per kilo of liempo exactly one year ago, based on DA data.

In a report released late last year, the United States Department of Agriculture (USDA) said that although hog prices declined in the months following the issuance of the supplemental MAV and lower tariffs, prices started to rise again in November.

He attributed the rise to several factors, such as high gasoline prices; increased demand around the Christmas holiday season; and policies that have prevented the full use of pork AVM and disruptive meat labeling requirements.

In March, National Economics and Development Authority (NEDA) Undersecretary Mercedita Sombilla said the extra supply due to lower fares and additional MAV had helped drive down the meat inflation and kept prices from skyrocketing while local production still did not come out.

“The government should instead focus on local production, with strategic action plans for a sustainable food supply, not dependent on imports,” Tambago said.

For its part, the Philippine Association of Meat Processors Inc. (PAMPI) expressed its gratitude to President Duterte for extending the reduced tariffs on pork.

“This will allow us to provide affordable prices for our pork products for the benefit of consumers. We are all still recovering from the impact of the pandemic and facing new challenges in the global supply chain, so the President’s decision is an important step in ensuring food security in these times,” said the Vice. -PAMPI President Jerome Ong to The STAR in a text message. .

In addition to pork, EO 171 also extends until the end of the year the reduced tariff of 35% on imported rice under EO 135, which was signed last year to diversify sources. in a context of rising world prices.

“It is necessary to temporarily maintain the reduced tariffs on imported rice and pork products to achieve the objectives of EOs 134 and 135, capitalize on the gains already made by these measures, all with the aim of increasing the supply of these products in the country, diversifying the country’s market sources and maintaining affordable prices, in order to ensure food security,” reads the EO.

He pointed out that the conflict between Russia and Ukraine has economic and trade implications for the Philippines, as the two countries account for 30% of world wheat exports, 20% of corn, mineral fertilizers and natural gas, as well as than 11% of oil. exports.

“The increase in petroleum products, corn and fertilizers generated a corresponding sharp increase in domestic commodity and energy prices, thereby putting upward pressure on inflation,” the EO said. .

Seeking comment, Free Farmers Federation (FFF) national director Raul Montemayor said the extended rice tariffs were unnecessary.

“In the case of rice, it’s totally unnecessary because non-ASEAN imports have not increased significantly despite the tariff reduction and the government is simply forgoing much-needed tariff revenue,” Montemayor said.

He said they would ask President-elect Ferdinand Marcos Jr. to rescind the EO once he takes office.

In addition, EO 171 also reduces import tariffs for corn and coal until the end of the year.

Under the EO, customs duties on maize are 5% for in-quota imports and 15% for out-of-quota imports, while zero customs duties are imposed on coal imports.

The OE stressed that it was also necessary to reduce tariffs on imported corn and coal to mitigate and stabilize the impact of inflationary pressures caused by the Ukrainian-Russian crisis, by expanding sources of supply and by reducing the prices of key commodities.

He noted that corn is used as a raw material in the production of feed, food and other industrial products, pointing out that it accounts for more than 50% of the total production cost of broiler farms. and pigs on a large scale.

Furthermore, he pointed out that coal is also an important raw material in power generation as it contributes to more than half of the power generation in the country in 2020.

Philippine Maize Federation (PhilMaize) President Roger Navarro expressed hope that the reduced tariffs for maize imports would be temporary and that the tariff revenue generated would be used to develop the maize sector.

“In this regard, we respect the president’s decision. Furthermore, we sincerely hope that the necessary investments for post-harvest facilities and maize storage that our maize sector has long needed will be made and implemented in strategic maize growing areas of the country.” , Navarro told The STAR in a text message.

Navarro had previously urged the government to focus on supporting and stabilizing local production instead of lowering tariff rates on corn imports, which would discourage local industry.

“The effects of this tariff reduction will certainly be felt by at least 850,000 Filipino farm families who depend on maize, with at least five per family member. This would easily represent 4.5 million Filipinos dependent on maize farming, not to mention the multiplier effect of the labor involved along the maize service chain. It will surely not inspire our Filipino people, but rather cause misfortune, contributing to poverty and risking peace and order in the countryside,” Navarro said in March.

In March, Socio-Economic Planning Secretary Karl Chua said the government’s economic development hub had proposed 14 measures to mitigate the expected impact of the war between Ukraine and Russia, which has driven up world petroleum product prices.

Among these proposed measures were the extension of reduced tariffs on pork and rice until the end of the year, as well as reduced tariffs on corn imports.

Apart from reducing tariffs on agricultural products, other government efforts to cushion the impact of the Russian-Ukrainian crisis on the country’s food security are the implementation of the 24 billion peso Plant Plant 2 program.

Most of the program’s budget, 20 billion pesos, was allocated to fertilizer subsidies. In addition, urban and peri-urban agriculture, local production of animal feed, aquaculture and mariculture, fishing and food mobilization have been allocated a budget of 1 billion pesos each.