No price increases seen as gov’t cracks down on meat smuggling

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04:15 PM May 4th, 2013

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By: DJ Yap, May 4th, 2013 04:15 PM

MANILA, Philippines—The prices of pork and poultry will not go up in spite of a new Department of Agriculture order that seeks to curb the smuggling of meat by fly-by-night operators, two associations of local meat producers said on Saturday.

Daniel Javellana, chair of the National Federation of Hog Farmers Inc., and Edwin Chen, president of the Pork Producers Federation of the Philippines Inc. or Pro-Pork, defended the department’s  Administrative Order No. 9, which raised the minimum capital requirement for meat importers, among other new policies to stop meat smuggling.

In a news release, Javellana assuaged fears raised by the Philippine Association of Meat Processors Inc. (PAMPI) that the new order would jack up meat prices and implement trade barriers, arguing that AO No. 9 would “actually strengthen the industry by cleaning up the list of importers.”

“AO No. 9 provides for a minimum capital requirement of P5 million for meat importers. This aims to legitimize the system because there were undercapitalized fly-by-night meat importers in the past who were allowed to operate prior to this new order,” Javellana said.

“This new order actually aims to end the loopholes in the process that allows smuggling,” he said, recalling how some unscrupulous meat importers used to falsely declare their shipments of prime cut meat as offal, which carried a lower tariff of only five percent.

Chen also questioned PAMPI’s belated reaction to the March 18 order  when the industry group was actually part of the consultations held last year that led to its issuance.

“AO No. 9 is the product of a year of consultations. The DA and the National Meat Inspection Service (NMIS) held a meeting on June 7, 2012 among meat traders, importers and processors and PAMPI was present during that meeting. Maybe they forgot that they were present?” Chen said.

“P5 million is equivalent to the [value] of one 40-foot container van [of meat products]. If you do not have the capital to import at least one container van, then you have no basis to be in this business,” he said.

“Do we want fly-by-night importers to continue with their operations? This policy in fact protects meat processors in particular and the meat industry in general,” he said.

Chen also noted that, based on NMIS data, cold storages remain in full capacity despite the new order, debunking PAMPI’s claim that this would create an artificial demand that would spike prices as there would be fewer importers able to comply with the requirements of AO No. 9.

“The volume of imported meat in cold storages, based on NMIS data, is at 8.8 million kilos. Add that (to) local meat production and that gives you 10 million kilos. So how can they claim that AO No. 9 is restrictive when our cold storages are in full capacity?” he said.

AO No. 9 requires new meat importers to submit their audited financial statements to the NMIS to qualify for accreditation, and imposes a minimum paid-up capital requirement of P5 million for new meat importers.

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