TO stabilize pork prices, the Department of Agriculture (DA) has submitted its recommendation to President Duterte to increase the minimum access volume (MAV) of pork to 404,210 metric tons (MT).
During the joint hearing of the House Committee on Agriculture and Food and House Committee on Trade and Industry, Agriculture Secretary William Dar announced that the recommendation of the MAV Management Committee is now awaiting the signature of the President, who will issue the necessary document for implementation of the new measures.
“Last night [Monday], we have submitted to Malacañang the resolution by the MAV Management Council recommending an increase in the MAV for pork for the MAV year 2021 and is now awaiting for the President’s signature,” Dar told lawmakers.
At a news briefing in Davao City on Tuesday, Presidential spokesman Harry Roque confirmed the MAV Management Committee has already finalized its recommended quota for imported pork.
“They already have recommendation to the President. At the right time, I will announce what [would be] his decision and how much [pork] we will import,” Roque said.
The government has raised its proposed volume of imported pork this year to address the expected local demand for the food item. The current MAV is only at 54,000 MT.
Moreover, Dar, citing current hog stock, said local farmers could only supply between 1.2 million MT and 1.3 million MT of pork, while demand for the said food item is at 1.6 million MT.
Based on the DA’s simulation, the country may suffer a deficit of 388,790 MT, which translates to an 88-day shortage. Using industry estimates on the impact of African swine fever (ASF), the country may have a shortfall of 530,871 MT.
Under Republic Act 8178 or the Agricultural Tariffication Act, in case of shortages or abnormal price increases in agricultural products, whose quantitative restrictions are lifted under this act, the President may propose to Congress, revisions, modifications or adjustments of the MAV. Provided, however, that in the event Congress fails to act after 15 days from receipt of the proposal, the same shall be deemed approved.
The government is considering temporarily raising the MAV to bring down the high prices of pork in the country, particularly in the National Capital Region (NCR), as a result of dwindling stocks from local hog farms that were hit hard by ASF.
Dar also said the tariff commission is finalizing its report and recommendations to the Cabinet committee on tariff and related matters regarding the DA’s separate proposal to further lower tariff for pork for a period of one year.
The DA petitioned to lower the tariffs for in-quota pork imports from 30 percent to 5 percent for the first six months; and to raise it afterward to 10 percent for the succeeding six months.
The DA also petitioned to lower the out-quota tariff for pork to 15 percent for the first six months and increase it to 20 percent for the next six months. Out-quota pork imports are slapped with a 40-percent tariff.
Meanwhile, the Pork Producers Federation of the Philippines (ProPork) President Edwin G. Chen urged the agriculture department to set the price ceiling of pork products between P330 and P360.
“Setting the price ceiling of pork products at P330 to P360 will be more beneficial to hog producers than subsidy. This price ceiling will work for everyone. This will encourage hog raisers to produce more,” he said.
For his part, Dar said, the agency is open to a dialogue on the proposal to revise the price ceilings for kasim, pigue and liempo.
A 60-day price ceiling for pork products being sold in markets in NCR was imposed following the implementation of Executive Order (EO) 124 to ensure the food commodity remain affordable to most consumers.
EO 124 imposed a price ceiling for kasim/pigue at P270 per kilo and liempo at P300 per kilo.
Long-term solution
IN his manifestation during the hearing, House Ways and Means chair and Economic Stimulus and Recovery Cluster co-chairman Joey S. Salceda said that a sustainable and long-term solution to issues of price and supply of pork is better feed supply and more modern support systems.
Salceda said that while direct importation of meat may lower consumer prices in the short term, the move may be unsustainable given the growing global demand for pork, and slower growth in global pork supply.
“The problem with livestock is feeds, feeds, feeds. We must explore options to expand our feed supply and diversify our sources of feed, including developing root crops. Only then can we acquire cost-competitiveness and comparative advantages in producing meat. In other words, to solve the issue of pork supply security even after the African swine fever crisis is over, it’s all about feeds,” Salceda said.
“We have a comparative advantage on corn, a key feed ingredient. But we do not have the kind of consolidated land needed for such other feed ingredients [like] soybean. This is what we may need to import,” Salceda said, offering feed importation as an alternative to direct meat importation.
“In 2020, global pork supply has only grown by 3 percent, but in some accounts, demand may have grown by as much as 13 percent, despite the pandemic and its impacts on income. This is a development that will likely continue. Importing meat, then, may not be quite the quick solution we think it could be,” he cautioned.
Citing global examples of livestock development despite the initial lack of comparative advantage, Salceda said that “China, a leading pork producer, does not primarily produce its own feeds. In fact, it produces almost none of the soybeans it uses to feed its hog industry, but imports it from Brazil and the United States. This is something we might explore, instead of directly importing meat.”
The House tax chief also warned that the food price issues may be merely symptoms of structural problems in the country’s agriculture sector.
“On market efficiency, the importance of cold storage facilities and facilities that extend the shelf life of surpluses, to smooth over fluctuations in supply. I urge the Department of Agriculture and the committee to consider making these inputs as part of our infrastructure planning for agriculture,” Salceda suggested.
“I have consulted with key industry players on the production side of the livestock sector, and after studying their issues, my conclusion is that we must build the support system that will make us competitive, beyond merely solving supply deficiencies through importation. This will include modernizing logistics, post-harvest facilities, support for input production such as feeds, and more efficient value-chains,” the Albay lawmaker added.
“While the current food price crisis demands immediate action, we must not ignore the fact that this is merely a symptom of our structural vulnerabilities. As such, our actions must always have a view towards the structural and the long term,” Salceda explained.
The lawmaker also warned that unless key changes are made soon, the problem will continue to worsen every year.
“The Philippine population is growing by 1-2 percent every year. With Covid-19, we expect a baby boom that will mean another generation of more mouths to feed. To add to this, with affluence comes more demand for food. That means, as we grow from a lower-middle-income to an upper-middle-income economy, our food demand will grow faster than our own population,” Salceda pointed out.
“Finally, consumer preferences will not change. For better or for worse, Filipinos like pork, and I can do almost nothing to change that. Unless we decisively address supply, we will always face food crises every five to 10 years. This is no isolated incident,” Salceda added.
“There are only a handful of cold storage facilities in the Philippines. We also have practically no canning facilities for our farmers, to address surpluses in vegetables and other produce. Warehousing and milling of grains, our leading feed source, is dismal and wasteful,” he said. With Samuel Raphael Medenilla
Image credits: Nonie Reyes