Senators dispute need for tariff cuts

Several senators geared to challenge the proposal of the Department of Agriculture (DA) to ease import restrictions in a bid to lower persistently high prices of pork.

Senators Juan Miguel Zubiri, Cynthia Villar, Francis Pangilinan, Imee Marcos, Nancy Binay and Grace Poe agreed on Thursday to support a resolution against the DA’s move to cut pork tariffs and ease import limits.

Villar, Senate committee on agriculture and food chair, said the DA’s recommendations would severely affect the recovery of the livestock industry from the African swine fever (ASF) epidemic that had decimated a large part of the country’s swine population.

Trade-off ‘too much’

She also echoed the sentiments of industry groups that easing import restrictions would put backyard raisers— who produce 60 percent of the local supply—out of business while only a few importers would benefit.

Alyansa Agrikultura claimed that the approval of a cut in pork tariffs and an increase in imports granted lower tariffs would result in revenue losses worth P12 billion—a trade-off that lawmakers described as “too much” because that would result in a price cut of only 50 centavos.

If approved, the DA proposal would reduce the tariffs slapped on pork to as low as 5 to 15 percent over the next six months and 10 to 20 percent for the next six months, from in-quota and out-quota rates of 30 to 40 percent.

It would also raise the volume of pork imports under the minimum access volume (MAV) to 404,210 metric tons (MT) from 54,000 MT. Lower tariffs are imposed on imports under MAV.

Tug-of-war

The tug-of-war between lawmakers and industry groups on one side and the DA and economic managers on the other is a critical balancing act for President Duterte who needs to appease local hog raisers already on edge due to ASF and ensure that the country will not slide further into recession.

The DA earlier said that Mr. Duterte already approved its recommendations “in principle” but, under the law, the chief executive may only meddle with tariff concerns when Congress is not in session.

Until lawmakers go on break from March 27 to May 16, both sides have a fair chance of getting Mr. Duterte’s support.

“We have nothing else to do but wait,” an official from the Philippine Association of Meat Processors Inc. said.

“On a global scale, meat supply is getting scarcer by the day and other countries with bigger economies like Russia and China are on forwarding bookings and ordering in bulk … we cannot foretell how much it will cost by the time an order is issued, and whether there will be available stocks for us.”

June at earliest

Importers would need 60 to 90 days to order and ship pork, depending on the country of origin. This means the earliest arrival of pork shipments may not happen until June.

Rosendo So, chair of the Samahang Industriya ng Agrikultura, criticized the DA for “pushing policies that would destroy and annihilate the industry when it is the very institution that must protect it.”

He said they would continue to work with lawmakers to “help explain to the President the real situation of the industry.”

Rising meat prices in public markets pushed the country’s inflation to a two-year high of 4.2 percent in January and 4.7 percent in February.

The 60-day price freeze approved by the Office of the President, meant to immediately squash high prices of pork, has so far proven to be ineffective.

As of this week, pork prices in Metro Manila average between P320 to P350 a kilo, against the price ceiling of P270 to P300 per kilo.

National Federation of Hog Farmers Inc. president Chester Warren Tan said hog raisers and traders in the Visayas and Mindanao were beginning to limit their shipments to Metro Manila given the stringent price points.