By Cai U. Ordinario & Jasper Emmanuel Y. Arcalas
Poultry growers and meat processors said they are not willing to make a compromise on the tariffs for mechanically deboned meat (MDM) and offal of chicken and turkey.
The United Broiler Raisers Association (Ubra) said it stands pat on its call to revert the tariffs on MDM to its 2012 levels once the Philippines removes the quantitative restriction (QR) on rice.
In an interview with the BusinessMirror, Ubra Chairman Gregorio F. San Diego Jr. said the current most favored nation (MFN) rates for some imported poultry products are already making life difficult for local poultry growers.
Currently, the MFN rate for MDM for chicken and mechanically separated meat of turkey is at 5 percent, while frozen turkey offal and meat cuts are slapped a tariff of 20 percent.
“They will kill the local poultry industry, which is what is happening now,” San Diego said in Filipino.
He also said that even if farm-gate prices are low, consumers do not benefit from this. San Diego noted at the height of the bird-flu outbreak, chicken prices fell to an average of P38 per kilogram, but retail prices remained at P100 per kg.
‘Retain current tariffs’
The Philippine Association of Meat Processors Inc. (Pampi) warned that the price of canned goods and processed meat products would go up if the tariffs on MDM and offal of chicken go back to 40 percent.
Pampi reiterated its warning on the sidelines of the recent Tariff Commission (TC) public hearing on the group’s proposal to retain the current tariff rates on turkey/chicken MDM and turkey offal.
“We are looking for the retention of the tariffs. We will continue to push for the retention,” Pampi Executive Director Francisco Buencamino said when asked if his group is amenable to a possible compromise.
In its position paper submitted to the TC, Pampi argued that reverting the current 5-percent tariff on chicken MDM to 40 percent would result in double-digit hikes in the prices of processed meat products, such as hot dogs and luncheon meat.
MDM is one of the primary raw materials used by meat processors to produce canned meat and hot dogs.
“The prices of hot dogs and canned meat products that contain MDM will go up by 12 percent to 17 percent,” according to Pampi’s position paper, a copy of which was obtained by the BusinessMirror.
“But if the tariff on MDM stays at 5 percent, this price increase can be avoided,” it added.
Nonetheless, Buencamino said Pampi would accept and comply with the government’s final decision on their proposal.
TC Chairman Marilou P. Mendoza said the commission will need a month to investigate and evaluate the position papers submitted by the industry groups.
The tariffs on chicken and turkey MDM and turkey offal were slashed as part of the Philippines’s concessions to other member-countries of the World Trade Organization (WTO) for securing a waiver on the special treatment on rice in 2012.
The waiver extended the Philippines’s rights to impose QR on rice until June 30, 2017.
Under the waiver, the tariffs on MDM and turkey and chicken offal should revert to its 2012 levels once the waiver expires and the Philippines has successfully converted its rice QR into ordinary customs duties.
The Philippines was not able to convert its rice QR into tariffs last year but President Duterte issued Executive Order 23 in May 2017, which extended for another three years the reduced rates of duty on agricultural goods, including MDM, covered by the country’s tariff commitments to the WTO.
The lowered tariffs on MDM and turkey offal would remain until 2020 before reverting to its original rate of 40 percent in 2021, or when the government passes a rice tariffication law, whichever comes first.