DA considering recall of price cap on pork, chicken

MANILA, Philippines — The Department of Agriculture (DA) is considering the recall of the executive order that imposed price caps on meat products, which lawmakers and consumers have lamented only led to tighter meat supply and failed to lower prices.

At a hearing of the Senate committee on agriculture and food last Monday, Agriculture Secretary William Dar spoke of the possibility of asking Malacañang to withdraw the controversial EO 124 issued last Feb. 1 amid the prolonged “pork and chicken holiday” by market vendors in Metro Manila.

“As regards supply, we still have enough supply, we mobilized hogs from regions in the country. Even the prices are going down and it’s working,” Dar said in response to Sen. Risa Hontiveros during the same Senate hearing.

“We are going to study your (recommendation) on the price ceiling, if we can recommend to the President to stop it,” Dar said in Filipino.

Prices of pork products have soared as the supply of hogs has been depleted because of African swine fever (ASF). The significant increase in pork retail prices prompted President Duterte to issue the EO that set price caps of P270 per kilo for kasim or pork shoulder, P300 per kilo for liempo or pork belly and P160 per kilo for dressed chicken.

Some hog traders and vendors have claimed that the price ceilings are too low given high production costs. They are holding a pork holiday to protest the EO.

Hontiveros asked Dar whether or not there has been an assessment on the impact of the EO as it apparently has not achieved its desired effect.

“Why has it come to this, pork holidays? And they have been forced to stop selling and transporting,” the senator said. “Clearly, imposing these price ceilings has only worsened our food crisis.”

She warned that the 60-day effectivity of the EO was too long that “instead of just going on holiday, our meat sellers would resign.”

Hontiveros noted that the price caps have been criticized by market vendors, farmers, economists and lawmakers for being unfeasible, as higher transportation costs for pork and chicken supplies make the mandated prices too low to be tenable.

Instead of helping consumers, she emphasized that the move has forced some vendors and traders to close their stalls altogether.

The senator added that the DA should look into more feasible and effective approaches to bringing down food prices and increasing food supplies in the country, such as expanding the number of hog raisers and suppliers covered by the insurance program of the PCIC.

Hontiveros also urged the DA and other related agencies to act with more haste in formulating and implementing programs to deal with rising costs of food products.

The committee, chaired by Sen. Cynthia Villar, has been conducting an inquiry on high food prices and tight supply of pork and chicken.

Senators have warned that the country is going to lose at least P16 billion this year and see its hog industry collapse if the government implements the DA’s proposal to raise the minimum access volume (MAV) and reduce tariffs for pork.

In separate manifestations during the hearing, Sens. Nancy Binay, Imee Marcos, Francis Pangilinan, Hontiveros and Villar strongly opposed the reduction of tariffs and the high MAV proposal that they said was double than the estimated shortage of 200,000 MT of pork as these would drive local hog raisers, who are already reeling from ASF, to ruin.

Villar estimated that ASF has wiped out over a third of the country’s pig stocks, threatening food security in a country already reeling from the economic impact of the COVID-19 pandemic.

Private industry hog raisers estimated that the actual figure is around 4.7 million heads affected by ASF, which is over a third or 36 percent of the total population, she said.

“Under the guise of protecting the consumer, the DA appears to be incentivizing importers, who, for sure have already earned a lot during the past few years they are in the industry,” she added.

The senator said it appears that the DA will find it hard to justify raising the MAV, which has the effect of increasing pork imports based on the agency’s own data.

She said that last year, pork consumed in the Philippines was placed at 13 kilograms per person per annum. At a population of 109 million, the demand was 1.417 million MT per annum as against a supply of 1.196 million MT or a deficit of 221,000 MT.

Villar said the DA has not been clear on how the reduction in tariffs as well as raising of the MAV was computed.

Local hog raisers warned that over-importation would likely lead to the excess supply being dumped in the Visayas and Mindanao that have no shortages.

Insurance for hog raisers

Meanwhile, the government is considering providing a 50-percent insurance subsidy to hog raisers to address the lack in pork supply caused by the ASF.

Augmenting the supply of pork in the market was one of the topics discussed during last Monday’s Cabinet meeting at Malacañang, according to Cabinet Secretary Karlo Nograles.

“One proposal being studied is an insurance subsidy of 50 percent for commercial hog raisers that will utilize the quick response fund under the QRF of the Department of Agriculture. This is just one initiative being considered to help our hog farmers increase supplies,” Nograles said at a virtual press briefing yesterday.

“What is important now is that the measures designed to respond to economic concerns are continuous while the rollout of the vaccines is being prepared. One of them is giving additional support for our hog raisers to address the lack of supply of pork in the market,” he added.

The proposal has yet to be approved by the Philippine Crop Insurance Corp. (PCIC) board.

“The PCIC Board has to meet tomorrow (today) to discuss and approve the DA proposal,” Agriculture Assistant Secretary Noel Reyes told The STAR yesterday.

To ensure enough supply of pork in the market, the government bought hogs from the Visayas, Mindanao and parts of Luzon that were not affected by the ASF.

It has also formed an anti-hoarding task force and has allocated P27 billion in loans to support the hog industry.

A proposal to import more pork at lower tariffs has also been submitted to Duterte for his signature. The recommendation seeks to raise the MAV for pork imports from 54,000 metric tons to 404,210 MT as the demand for the product is projected to hit 1.6 million MT this year, higher than the expected pork supply of 1.22 million MT.

During the same Monday Senate hearing, Dar said the DA is eyeing to shoulder 50 percent of the premium of commercial hog raiser’s insurance.

He added that the total premium for five million hogs, composed of four million fatteners and one million breeders, would amount to P1.48 billion.

Under the proposed premium subsidy, the DA will shoulder 50 percent of the premium which amounts to P740 million, according to the agriculture chief.

At present, the PCIC offers insurance coverage for ASF-culled hogs.

The insurance coverage of a fatter is at P10,000 per head, with a premium of 2.25 percent.

In contrast, coverage for a breeder is at P14,500, with a premium of four percent.

The DA earlier said small backyard hog raisers are given free insurance if they are listed in the Registry System for Basic Sectors in Agriculture.

Dar earlier urged backyard and commercial hog raisers to secure insurance packages so that they can recover part of their investments, in case their farms are affected by the ASF.

Sought for comment on the proposal for subsidized insurance premium for commercial hog raisers, Samahang Industriya ng Agrikultura chairman Rosendo So told The STAR that this would not solve the ASF problem.

So also called for testing imported pigs.

The Philippine swine industry, worth about P200 billion a year, has been hit by the ASF since 2019.

Latest data recorded 7,845 ASF cases, 173 new outbreaks and an additional 84,064 hogs culled.

The government said culled hogs totaled more than 500,000, but stakeholders place losses at more than four million. – Alexis Romero, Catherine Talavera