Feed producers seek cut in tariffs on yellow corn

The country’s largest group of animal feed producers has urged President Duterte to issue an executive order slashing tariffs on yellow corn, the primary raw material for manufacturing animal feed.

According to the Philippine Association of Feed Millers Inc. (Pafmi), this move will help ease the country’s rising food inflation and reduce the high cost of producing meat.

“The current tariff structure, at a maximum of 50 percent, is bloating the cost of imports to unrealistic levels, triggering increases in the production costs of livestock and poultry raisers that result in uncompetitive prices of local meat products compared to meat imports that now enjoy lower tariffs,” the group said.

The Pafmi is seeking a uniform tariff of 5 percent on yellow corn from the current rate of 35 percent for those under the minimum access volume (MAV) and 50 percent for those beyond the MAV and sourced from non-Asean countries.

Feeds account for about 60 percent of what farmers spend to raise livestock and poultry.

“Because supply in the Asean has also tightened due to the region’s rising requirements and China’s purchases … access to more competitive feed corn sources is needed to ensure adequate supply for the feed millers and the livestock and poultry sectors. However, under the current tariff structure, even imports from other sources would not help tame corn and feed inflation,” it added in a statement.

The group’s request came as the Department of Agriculture (DA) is set to release this month the findings of its technical working group tasked to study whether reducing import duties on yellow corn will not only benefit consumers and millers but also local producers who have been vehemently opposed to Pafmi’s proposal.

Roger Navarro, president of the country’s biggest group of corn producers, said the DA should prioritize helping local corn farmers, especially after Severe Tropical Storm “Maring” destroyed P150 million worth of corn across 8,658 hectares of farmlands. This does not include the costs that the farmers will shoulder for rehabilitation and clean-up operations.

Navarro added that while the industry understands the need to import, there is no need to further trim tariffs as this will eventually kill the local industry that is already struggling from higher input costs, price instability, and the lack of post-harvest facilities, among others.

For Pafmi, Maring’s onslaught has only made the tariff issue more urgent as this will further reduce the supply of yellow corn, especially with the onset of La Niña.

The Duterte administration, to temper the country’s food inflation, has instituted reforms that eased the importation of several agricultural commodities including rice, meat and fish despite the opposition of local producer groups.

A new tariff regime for corn, Navarro noted, may discourage corn farmers to replant.