Debate on tariff rate increases on meat products continues

The country could earn P5.3 billion if the tariff rates on the mechanically deboned meat (MDM) of certain agricultural products were raised as earlier agreed on, an industry group said.

Meat processors, however, opposed this as they clashed with other agricultural industry groups in a Tariff Commission hearing on Wednesday.

The hearing sought insights on the petition of the Philippine Association of Meat Processors, Inc. (PAMPI) to retain the current tariff rates on MDM of chicken, turkey, and offals.

Interests were pit against each other as favoring the request of PAMPI might come at the cost of other local industries which do not have the same resources to import.

The debate goes on as tariff rates might soon shoot up at a level that PAMPI fears would drive the industry to increase the prices of hot dogs, luncheon meat, and the like. MDM is used as input for these products.

Revenues

Rosando So, chair of Samahang Industriya ng Agrikultura (Sinag), said the country has more to gain if the rates were increased instead to 40 percent.

He said imports have reached around 258.85 million kilos last year. These entered the country at a low tariff rate of five percent.

“If we base this on the volume of 258 million killos of [MDM imports] at 40 percent, we will collect around P5.3 billion, compared to only P663 million with the 5 percent tariff,” he said.

These rates — 5 percent tariff on processed meat and 20 percent on offal — were reached years back as part of the Philippines’ concession with other countries in the World Trade Organization.

In exchange for imposing a quantitative restriction (QR) on rice, the Philippines was expected to compensate by opening its doors wider for other countries by reducing tariff rates on certain agricultural imports.

This, however, is only temporary. Rates were supposed to revert to their original level of as much as 40 percent after a few years, but the arrangement was extended a number of times before.

‘You’re going to kill us anyway’

Elias Jose M. Inciong, president of the United Broiler Raisers Association, said the poultry industry has been waiting for this for a long time.

Commenting on the pre-scheduled increase in tariffs for MDM, he said: “Our expectation is there will come a time that our hardship would be over. Our problem is apparently there are efforts to extend our problems.”

He also claimed that the current rates are used by some for technical smuggling, wherein some agricultural products would enter the country classified as MDM.

“You might as well legalize smuggling because you’re going to kill us anyway by [retaining] the tariff. We can’t compete because these are coming from countries with very subsidized agricultural sectors,” he said.

The current rates, however, will revert back to as much as 40 percent by July 2020, after years of extending the arrangement. This, however, could happen sooner if lawmakers pass the rice tariffication bill, a priority measure of President Duterte.