Do not implement tariff reduction and MAV expansion

(The Philippine Star) - April 1, 2021 - 12:00am

Dear President Duterte,

This is to request your action so that both the proposed tariff reduction for porks import as well as the in-quota Minimum Access Volume (MAV) expansion are not implemented. This is also the unanimous position of the Senate.

We had earlier submitted to them documents with statistical information to support our position objecting to these two proposals. For this l represent the Agrifisheries Alliance (AFA) as its national coordinator.

The AFA is composed of five coalitions: (1) farmers and fisherfolk (Alyansa Agrikultura, AA); agribusiness (Philippine Chamber of Agriculture and Food, Inc., PCAFI), science and academe (Coalition for Agriculture Modernization in the Philippines, CAMP); rural women (Pambansang Kilusan ng Kababaihan sa Kanayunan, PKKK) and multi-sectors (AgriFisheries 2025, AF2025).

We have been having ongoing communication with you on our deplorable agriculture situation and our recommendations since we started last July 27, 2020. But our very first meeting was at 4 a.m. on April 16, 2016. Our five coalition heads met with you and Bong Go when you were still a presidential candidate.

Despite a commitment of front page coverage from a major newspaper for all the presidential candidates who would discuss their presidential plains for agriculture, you were the only one who accepted challenge. I even recall your having moved our 10 p.m. schedule to 4 a.m. because of alleged threats on your life. During this closed door meeting, you gave us your very progressive agriculture views. You then committed to support farmer, fisherfolk and the agriculture sector if you won as president.

Unfortunately, now that you are President, some of your advisers appear to be giving you a direction very different from the vision you gave us during our 2016 meeting. Implementing the proposed tariff reductions and expanding the MAV is a move that appears to be a betrayal by them. This favors the rich, rather than the poor: the importers and fishers, rather than the farmers and backyard hog raisers.

At the time when the hog sector is suffering, we have asked for decisive action to address the African swine fever (ASF), which the government should have stopped in the first place. We have requested measures such as indemnification for ASF casualties, more testing and laboratory facilities to contain the ASF spread and quarantine facilities at the border to stop ASF entry. For these requests, government has told us they do not have enough money to give them.

And now, your advisers are proposing pork tariffication and MAV expansion. This means that the P11 billion in foregone government revenue (P8 billion in tariff reduction and P3 billion in MAV expansion) will now go to the importers and traders who don’t need it, rather than the hog producers and backyard raisers who require it if they are to recover from this ASF crisis.

The tariff reduction and MAV expansion could be argued if it will bring in the imports we need. But if the imports will come in anyway with the current tariffs, why take this unnecessary move at such a great cost to us?

We must note that because of measures the government has taken, the average pork price has already decreased from P400 to P330. Most of the profiteering has already been successfully curbed, for which the government should be congratulated.

Of course, an increase in supply through imports will be helpful. But there is no need to decrease tariffs to get this added supply. Along with others, the AFA submitted documents to the Senate to prove this. On the conservative assumption of monthly turn-over (a weekly turn-over is common), the incremental Return on Investment (ROI) is already a high annual 120 percent ROI.

There are enough importers who will want this attractive return and provide the added supply. So why give the additional P11 billion (or any amount) to them if they will import anyway? They do not need it; the suffering hog producers and backyard raisers do.

The irony is that the hog industry is not responsible for the ASF, which they believe government should have in the first place contained. To add insult to injury, the money that can be used to help them will now instead be given to importers and traders, while they continue to have their requests denied because of alleged lack of funds.

In addition, these subsidized imports with the lowered tariffs will harm both current pork production and dampen the motivation for more investments needed to expand this production. In addition to money being uselessly wasted by giving it to importers and traders who do not need it, and depriving our hog industry for this money to recover from the ASF, it will send the wrong signal that our government does not care for our agriculture and our farmers. Your advisers are going directly against the vision you are trying to achieve for us.

Mr. President, we disagree strongly with the direction given to you by your advisers. Instead of helping you, they may unconsciously be hindering you. The Senate and the House of Representatives share the view of us stakeholders, whose lives will be greatly affected by the decision you will take on this matter. We believe they, more than appointed officials whom we have not voted for, may understand better our plight. They have studied our documents and those of so many others very carefully. They all point to the direction we are asking you to consider. Please help us by not implementing your advisers’ position of reducing pork tariffs and expanding the MAV.

Thank you for considering this urgent and important request. – Ernesto M. Ordoñez, AFA National Coordinator

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