Many traders and some officials of government agencies were taken aback when
Agriculture Secretary Emmanuel F. Piñol announced the cancellation of import permits for animal and plant products last week. Piñol said the measure was meant to fight the outright and technical smuggling of agricultural goods. He said he reached a decision to scrap old permits after finding a “huge discrepancy” in the meat-importation data of the United Nations and the Bureau of Animal Industry (BAI).
Piñol noted that traders tend to “misdeclare” the agricultural goods they bring into the country, a practice known as technical smuggling. Unscrupulous traders will declare the imported product as something else, usually one that is levied a lower tariff, to avoid paying higher duties. In the case of pork imports, the Department of Agriculture (DA) noted that some traders declare pork cuts as offal. Pork cuts are usually slapped a tariff of 35 percent, while the government imposes a 5-percent to 10-percent tariff on imported offal.
In 2010 the Federation of Philippine Industries (FPI) complained that some companies undervalued the palm oil and palm olein they imported by as much as 90 percent. While the two commodities from Malaysia and Indonesia came in at zero duty pursuant to the Asean Free Trade Agreement, FPI said the companies dodged the payment of the 12-percent value-added tax. FPI charged that the traders were in cahoots with corrupt Bureau of Customs (BOC) officials.
The DA had taken additional steps to eliminate this illegal practice by declaring that it would inspect all shipments of agricultural goods first prior to the assessment of tariffs. While it remains to be seen whether the DA could sustain this effort, it is a good step to help fight technical smuggling, as it appears that the BOC is not capable of preventing it. Piñol and hog raisers themselves said the technical smuggling of imported pork offal continues to this day, despite their appeal to the government to stop it.
Domestic producers have been complaining for years of incurring losses due to the outright and technical smuggling of agricultural goods. For years, they have pleaded with the government to do something about agricultural smuggling, which makes it more difficult for them to become competitive. Their pleas, however, appear to have fallen on deaf ears. Now, one government agency has decided to do something about it. The BOC should follow its lead. It should rid its ranks of scalawags and work closely with the DA and other concerned government agencies to eliminate the scourge that is agricultural smuggling.