AN economist-lawmaker has filed two bills supporting the livestock and crops sector and directing tariff revenues towards domestic sector support programs.
House Committee on Ways and Means Chairman Joey Sarte Salceda said he filed the proposals in response to concerns about rising food and feed prices, and growing protectionism among the country’s import sources.
“I don’t think it’s wise to halt imports for needed goods by brute force. In fact, in some sectors, the bitter pill to swallow is we may have to lower some barriers, such as corn, where high domestic prices are already taking a bite out of the quality of poultry and livestock. But we can direct revenues from imports towards domestic sector support,” Salceda added.
Salceda has filed the Livestock, Poultry and Dairy Development Act, and the Universal Agricultural Tariff Allocation Towards Domestic Competitiveness Act, which will allocate tariff revenues from agricultural products towards development programs for domestic agriculture.
“For all the negative sentiment that the Rice Tariffication Law gets, one accomplishment it can boast of is raising yields. According to the Philippine Rice Research Institute, beneficiaries of RCEF programs need 33 percent less seedlings, and have 15 percent higher yields. In 2021, we produced a record-high palay harvest. So, the domestic support component is working, regardless of what one might think about the effects of the liberalization component,” Salceda said.
Following the RCEF model, Salceda has filed the Livestock, Poultry, and Dairy (LPD) Development Act, which he says “will address the high production cost, particularly in corn, the unorganized, backward, and small scale production in the livestock and poultry sectors, and fix the fragmentation in government structure for livestock and poultry.”
The features of the LPD Development Act include the rationalization of LPD support agencies into two agencies: a) Philippine Livestock and Poultry Authority and b) Bureau of Animal Safety and Regulations.
It also seeks the replacement of minimum access volume (MAV) system on livestock, poultry, and corn with a uniform 5-percent tariff rate, similar to rice tariffication.
The bill also mandates the allocation of tariff revenues for livestock and poultry earmarked for LP productivity improvement under Livestock and Poultry Competitiveness and Enhancement Fund, amounting to P3 billion.
The measure also mandates the allocation of tariff revenues for corn productivity improvement under the Corn Competitiveness Enhancement Fund amounting to P2 billion.
It also provides the exemption from taxes and duties of LPD farm inputs, veterinary and other supplies, equipment, machineries, breeders, etc
“The livestock and poultry sectors are particularly crucial. Protein deficiency almost certainly leads to learning deficiencies. In fact, students from countries with higher pork and chicken prices tend to have lower test scores such as in the Program for International Student Assessment,” Salceda said.
“Among children under five years of age, 28.8 percent or 3.2 million children are stunted, and protein and calcium are critical in that outcome,” he said.
“Corn is sixty percent of LPD production costs, so we need to address corn as well,” Salceda added.
Salceda also filed amendments to the Agricultural Competitiveness Enhancement Fund Law or Republic Act 8178, as amended.
“The ACEF is expiring this year. When it expires, whatever support programs are being funded by that law will no longer be available to the specific agri sectors. So, that’s the main point of urgency in that proposal,” he said.
“But, in a more long-term and structural view, we have always seen agricultural development as a matter of protecting the domestic sector from world trade rather than nurturing it enough to be competitive with the rest of the world,” he added.
Salceda said his proposal will change the ACEF from a lump-sum primarily used towards credit programs from farmers, to separate funds per crop sector, with programs primarily focused on machinery, seeds and breeding materials, and training, similar to the RCEF.
“The problem with credit is that it presents barriers of access to farmers. It’s not easy to borrow from banks. And it’s no guarantee of yield or quality improvements,” Salceda said.
Likewise, he added, the task of “ensuring that the theoretical damage due to world trade per crop is compensated correspondingly with domestic support from tariff revenues” is consistent with agricultural experts’ recommendation to provide more support programs for ‘nurturing’ the domestic sectors. He observed that, “far too many resources have instead been spent on ‘protectionist’ programs and policies.” According to Salceda, ACEF’s expiry this year “is an opportunity to reorganize its use and allocation towards such ‘nurturing’ programs.” Salceda said.
The lawmaker said these two bills will help the country put that fact in proper perspective.