Agricultural stakeholders expressed mixed views on the government’s proposal to recalibrate tariffs to cushion the effects of the Russia-Ukraine war on food supply.
Agricultural lobby group Samahang Industriya ng Agrikultura (SINAG) also hit the government’s apparent preference to import amid a global mindset of providing subsidies to help agricultural producers survive rising costs while stockpiling food in anticipation of possible supply disruptions.
“Stockpiling food means supporting, incentivizing and promoting local production.
Subsidizing local agriculture at this point is our only way to weather this crisis. We are the only country with an importing mindset amidst a crisis that is disrupting global food supply and logistics. Countries have reduced or suspend their exports as a way of addressing their food needs,” said Rosendo So, SINAG chair.
So said government should reconsider the planned extended tariff modification on pork and rice alongside a new rate for corn, saying previous reductions did not significantly pull down retail prices of goods.
He added due to the continued oil price hikes, local producers are shouldering increased cost of production and extending further tariff reduction on pork, rice and corn “will only exacerbate the dire situation of the agriculture sector.”
The government plans to extend the effectivity of Executive Order (EO) 135 which reduced the most favored nation (MFN) tariff rates for rice to 35 percent from 40 percent for in-quota imports and 50 percent for out-quota imports must be extended until year-end.
The EO that was issued in May 2021 was originally intended to only last for one year.
Government is also pushing for the tariff reduction on pork to 15 percent for in quota and 25 percent quota with a minimum access volume (MAV) of 200,000 metric tons (MT) to also be extended until December to temper price spikes.
For corn, the proposal is to lower its MFN tariff to 5 percent in quota and 15 percent for out quota from 35 percent with a MAV of 4 million MT until December, to limit the possible increase in the cost of animal feeds.
The Tariff Commission is currently hearing the proposals.
The Philippine Association of Feed Millers Inc. (PAFMI) welcomed government’s proposed adjustments on corn tariff, saying this would help keep prices of food affordable.
However, PAFMI is calling on the government to also consider temporarily reduce tariffs on all corn imports to a uniform 5 percent tariff or the same rate imposed on imports from Asean.
“The continued tight supply of corn in the region, mainly caused by China continuing to stockpile grains, is forcing feed millers to buy corn from outside Asean. Lowering the tariff on yellow corn to 5 percent will allow local feed producers to secure an adequate supply of yellow corn, their main input, and therefore ensure the availability of animal feeds at affordable prices,” PAFMI said in a statement.
PAFMI said as animal feeds account for 60 to 70 percent of the cost of producing meat while yellow corn accounts for 60 percent of the cost of producing animal feeds, reducing corn tariff to 5 percent will help bring down the cost of producing meats and eventually, their market prices.
PAFMI added yellow corn demand for feed milling was about 9 million MT while local corn production was only about 5 million MT, or a local supply sufficiency of only 57 percent.
The group said while feed wheat is commonly used and imported as an alternative to yellow corn due to its more competitive price, yellow corn is still the preferred feed input especially for poultry, given its inherent qualitative benefits over feed wheat.
PAFMI added that supply of feed wheat is currently challenging as the Philippines on average, imports 49 percent of its feed wheat demand mostly from Ukraine and a considerable amount from Russia. Jed Macapagal
