Duterte urged: Scrap pork tariffs to lower prices
MANILA, Philippines — A group of manufacturers of meat products on Tuesday asked President Rodrigo Duterte to remove duties imposed on imported pork to immediately cover a meat shortage in the country and bring down prices.
The scrapping of import duties was one of three proposals made by the Philippine Association of Meat Processors Inc. (Pampi) in a letter they sent to the President through Agriculture Secretary William Dar.
These emergency measures are apart from the Department of Agriculture’s (DA) own recommendation to increase the volume of imported pork that is now slapped with a 30-percent tariff.
Once the DA’s recommendation is approved by the President, the country would be able to triple its pork imports under the minimum access volume (MAV) of 54,000 metric tons (MT) currently to 162,000 MT, Dar said last week. A 40-percent tariff will be imposed on imports in excess of that volume.
Pampi proposed to bring in at least 50,000 MT of pork at zero tariff. This will encourage importers to procure more of the commodity and ease price woes, the group said.
It urged the state-owned Landbank to provide financing or trade credit to hog raisers and producers as an incentive to increase production while grappling with the African swine fever (ASF), which continues to spread.
Moreover, Pampi asked the President to allow the sale of frozen meat products in public markets until the current shortage eases. The DA prohibits frozen meat sales because most vendors in public markets do not have freezers.
“[These measures are] intended to provide fiscal support to hog farmers and producers to afford them the opportunity to generate income and compensate for huge losses arising from the ASF decimation of their hog farms,” said Felix Tiukinhoy Jr., Pampi president.
Easing import rules
“Our recommendation, we believe, is a much better way of alleviating the plight of the hog sector at no cost to the government rather than giving them financial dole outs,” he added.
Ramon Clarete, dean of the University of the Philippines’ School of Economics, said in an interview with the Inquirer that the most effective way to protect consumers from high pork prices was to ease import rules.
He recommended a reduction of tariff on imported pork within and outside of the MAV to 5 percent.
Clarete said a supply shortage “is addressed by giving incentives to suppliers to supply more.”
If the government insisted on just expanding the MAV, it should be implemented with conditions, he said. Importers must ensure that the shipments arrive within a month and that delays will mean forfeiture of their given allocation, Clarete added.
“We have so many suppliers and importers who can bring in pork, and that will give us better protection,” Clarete said. “Shortfall will be addressed quickly without need of price control.”
On Monday, Edwin Cheng, president of the Pork Producers Federation of the Philippines Inc., said 5.5 million hogs had died, or had been culled, since the ASF outbreak in 2019.
Prices of pork had risen steadily from P250 to P270 in September 2019 and recently jumped to P350 to P400 per kilo, making it more expensive than beef, which is considered “luxury” meat by many.
Dar admitted that the ASF had brought down the hog population in Central Luzon since early 2019, but he blamed traders and wholesalers for causing the spike in pork prices.
“They are making a large profit margin of more than P200 per kilo, between the farm-gate price of live hogs and the retail price of pork in public markets. They are raking in a lot,” Dar said.
According to the secretary, farm-gate prices range from P180 to P200 per kilo.
Dar cited the case of hog raisers in Batangas where farm-gate prices range from P180 to P200 a kilo. This was the basis for the DA’s recommendation to impose a price control on pork of P270 for leg or ham cut and P300 for pork belly.
But industry groups say the farm-gate prices cited by Dar do not apply to most hog raisers.
“In most provinces in Luzon, the farm-gate [prices are] currently between P240 and P250. If you add the cost to the ‘viajero’ (trader) and the reseller in the market, the rate they want to impose is too low,” Cheng said.
The DA said Metro Manila consumers outraged by high food prices, especially of pork and vegetables, might soon be pacified by supplies coming from nearby provinces.
Hog and poultry raisers, and farmers’ cooperatives and associations in Calabarzon and Mimaropa regions promised a supply stream to the metropolis, where food prices had risen by as much as 275 percent since last year.
As of Monday, a total of 700 kilos of assorted vegetables and 2 MT of poultry meat had been delivered to Quezon City, while 612 heads of hogs had been shipped to Pasay and Muntinlupa cities for slaughtering and trading.
More hogs are expected to be delivered from Palawan and Marinduque.
Dar said 80 MT of vegetables were set to arrive at Juliana market in Balintawak, Quezon City, and more vegetables and poultry products could be expected in the coming days.
The secretary said he was optimistic that these shipments would immediately cover the shortage and push down prices, which the DA believed were manipulated by unscrupulous traders.
The DA had asked the help of the Philippine Competition Commission in probing traders and wholesalers suspected of manipulating supply and prices.
It also partnered with the Department of Justice, Department of the Interior and Local Government, the Department of Trade and Industry, the Philippine National Police, and the National Bureau of Investigation to investigate, apprehend, and prosecute profiteers and manipulators.
Dar warned that those who would be found guilty of jacking up prices could be fined up to P100 million. No one has been penalized though since the start of the pandemic and during the imposition of a price freeze by Mr. Duterte last November. INQ
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