Import and die
Unrestricted poultry imports at a time of oversupply and depressed prices may mean the death of the industry.
This unabated import flow must be addressed with a calibrated strategy. Consider the table on the right.
Farmers lost 38-49 percent of their production cost. On the other hand, retailers got 40-60 percent more than the suggested retail price (SRP). The Department of Agriculture and the Department of Trade and Industry jointly determined that the SRP should be at most P60 above the farm-gate price. In other words, the farmers suffered while retailers benefited. The Price Act law was not effectively implemented.
In addition, there was a large oversupply. Frozen poultry inventory doubled from 47 million tons last year to 82.6 tons this year. Of this increase, local poultry supply rose by only 19 percent, while imports grew by 183 percent.
On May 8, with losses mounting and an oversupply increasing mainly due to imports, the Urban Broiler Raisers Association (Ubra) wrote the DA to request import action. On May 28, Ubra showed a DA video where, at a scheduled meeting, a DA official said local producers should regulate their production to make way for imports. A higher DA official later clarified that this was not their official position.
To date, Ubra says there is still no significant DA action on poultry imports, which continue unabated. Since I was a vice president for Asia of the United Nations Council for Trade and Development, I discussed with Ubra three policy suggestions:
– In the past, the DA discouraged importation of rice and corn during harvest time. Can the DA not do the same temporarily for poultry during this time of oversupply?
– If late Sen. Eduardo Angara suspended poultry importation for 90 days because it was facing a similar crisis, can the DA not follow this example?
– Since the rice quantitative restrictions (QRs) we got were given as a trade off for decreasing the tariff on mechanically deboned meat from 35 percent to 5 percent, why has there been no action to restore the tariff to 35 percent since we no longer have rice QRs?
On operations, there were two recommendations:
– After 22 years, why has the DA still not implemented Sections 38-42 of the Agriculture Fisheries Modernization Act, or Republic Act No. 8435? This mandates the creation of a market information system. Being largely blind, it is difficult to address smuggling and other critical agriculture issues.
– Why has the DA not yet established quarantine facilities major ports of entry? These could have detected the African swine fever that is destroying our hog industry, and can prevent entry of the China swine flu that was announced last June 30 as having “pandemic potential.”
Agriculture Secretary William Dar has been prevented by some internal DA personnel from knowing important details. We must work together to calibrate our imports during this pandemic. Otherwise, industries like poultry will die, and the government’s fight against poverty will be seriously undermined.
The author is Agriwatch chair, former Secretary of Presidential Programs and Projects and former undersecretary of Agriculture and Trade and Industry. Contact him via [email protected]
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