ECONOMISTS, importers and local food producers were at each other’s throats over the proposed extension of reduced tariff rates on imported agricultural commodities as the government advances discussions on the matter.
The Tariff Commission (TC) on Wednesday conducted its public hearing on the petition to extend Executive Order (EO) 171, with multiple groups and organizations in attendance.
The petition was filed by the Foundation for Economic Freedom (FEF) on the premise that the country is not out yet of the woods from the detrimental economic impact of the Ukraine-Russia war and other Covid-19 pandemic-related problems. Throughout its presentation on Wednesday, FEF argued and emphasized that prolonging the lower tariff rates on coal, corn, pork, and rice is “imperative” to slow down the increase in the prices of these commodities amid sizzling inflation.
The objectors to the push to extend lower tariffs were led by the Federation of Pork Producers Inc. and the National Federation of Hog Farmers Inc., United Broiler Raisers Association (Ubra), Samahang Industriya ng Agrikultura (Sinag), Philippine Maize Federation Inc. (PhilMaize) and the Federation of Free Farmers (FFF).
FEF calculations
BASED on its calculations, petitioner FEF said Filipino consumers saved P108 billion from lower pork tariffs this year and would save more next year at an estimated amount of P156 billion.
The lower pork tariffs, FEF argued, tempered the increase in pork retail prices as these averaged P287 per kilogram last year and P314 per kilogram this year.
If the lower tariff rates were not in place, the FEF claimed that pork prices would average at P355 per kilogram in 2021 and P397 per kilogram this year.
Corn tariffs
FEF said the lower corn tariffs would lead to a net benefit to consumers estimated at P4.2 billion from the period of April to December 2022.
The group claimed that every peso decrease in the price of yellow corn means the prices of pork, chicken meat and table eggs reduce consequently.
FEF’s computations showed that a P2.81 reduction in yellow corn prices would decrease pork prices by P1.12 per kilogram, chicken meat by P2 per kilogram, and table egg by P0.023 per piece.
“Extending EO 171, particularly lower corn tariffs, is imperative if the government wants to slow down the rate of increase of prices of corn-dependent products to ensure food availability and affordability of these key agricultural commodities,” the group said.
Groups such as the Meat Importers and Traders Association (Mita) supported FEF’s proposal to maintain lower tariff rates on pork in the short-term until local production records significant recovery and returns to the pre-African swine fever output level.
The Philippine Feed Millers Association (PAFMI) threw its support behind extending lower corn tariffs to help its industry cope with the estimated yellow corn shortfall of at least 4 MMT.
PAFMI also argued that lower corn prices would ensure cheaper local meat prices.
Pork producers
MEANWHILE, the Federation of Pork Producers Inc. and the National Federation of Hog Farmers Inc. opposed the extension of lower pork tariff rates, arguing that it would further derail and discourage local hog repopulation efforts as farm-gate prices remain below cost-to-produce levels. The United Broiler Raisers Association (Ubra) also bucked the extension of lower tariff rates on the petitioned commodities except for coal.
The Samahang Industriya ng Agrikultura (Sinag) opposed extending lower tariff rates on yellow corn, pork and rice.
The Philippine Maize Federation Inc. (PhilMaize) resisted prolonged lower corn tariff rates.
The Federation of Free Farmers (FFF), meanwhile, opposed extended lower tariff rates on rice imports, arguing that the country’s rice import sources were not diversified despite EO 171.
“Reduction in tariffs on non-Asean rice imports did not, and will not, significantly diversify sources of rice,” FFF said.
“No correlation between reduction in non-Asean rice tariffs and rice retail prices. Tariff reduction benefits mostly consumers of premium rice grades or importers and traders who pocket gains from reduced tariffs,” it added.
Sinag claimed that EO 171 was futile in lowering pork and rice prices in the market, with only importers allegedly benefiting from the tariff reductions.
“Why would any government sacrifice funding social welfare services and providing public health care projects, just for the benefit of these privileged importers?” it said.
“Increasing public revenues is the cornerstone of the economic program of all governments, bar none, amid the post-pandemic global economic recession,” it added.