House panel backs increase in MAV quota for pork

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Image via Flixtey / CC BY-SA 4.0

THE House committee overseeing taxes said it supports an expansion of the quota for pork imports that pay a more favorable tariff, known as the minimum access volume (MAV), but did not recommend a lowering of tariff rates, saying that such a measure would not significantly reduce pork prices.

Representative Jose Ma. Clemente S. Salceda, chairman of the House Committee on Ways and Means, said at a hearing Monday that lowering the tariff rate for pork imports will have a minimum impact on prices.

“I recommend to keep the tariffs but increase the MAV,” he told Department of Agriculture (DA) officials at the hearing.

“It is increased supply that will reduce prices… Your (proposed) reduction in tariffs from 40% to 5% can reduce CPI inflation by only 0.4%,” he also said in the hearing.

The committee has congressional oversight powers on tariff matters. The DA wants to reduce tariffs on pork to 5% for imports within the MAV quota and 15% for out-of-quota imports, from 30% and 40% respectively.

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The government is exploring ways to contain the sharp rise in food prices to avert a new inflation crisis, including price controls, expanded imports, lower tariffs, and increased shipments of pork to Metro Manila from distant farms that do not traditionally supply the capital.

The hog population on Luzon has been decimated by African Swine Fever, curtailing supply and causing prices to rise.

In a statement, Mr. Salceda said the impact on prices was equivalent to a 50-centavo reduction in pork prices per kilo, and concluded that such a change was “not worth the trouble” that the expansion in imports would cause to the farming sector.

He added that the only beneficiaries of tariff reductions will be big business, importers and supermarkets.

Backyard hog raisers make up 71% of the domestic hog industry.

Mr. Salceda proposed a scheme similar to the Rice Competitiveness Enhancement Fund (RCEF) using tariffs collected from pork imports to help upgrade the hog industry. “Let’s allow more importation at current tariff rates. Whatever is in excess of what we usually import, let’s use the tariff revenues as an RCEF for the swine industry. That could reach P14 billion more in tariff revenue if we import all of our shortfall.”

The DA has sent its proposal to expand the MAV quota to the President last month along with another proposal to reduce pork import tariffs. The DA wants a new MAV of 404,000 metric tons (MT) from the current 54,000 MT.

During the hearing, Agriculture Secretary William D. Dar said if the tariff reduction is approved by the President, the department will seek to prevent injury to the hog industry should the market be flooded by imports.

“We will have the arrival of imports in a calibrated fashion, ‘yung mga pangangailangan sa period na ‘yun, ‘yun lang po para sa ganun, hindi sobra sobra ang karne sa merkado (those that are needed for that particular period… so we don’t have an excess of meat in the market),” he said.

The DA is also carrying out a hog repopulation program which it is proposing for more funding, while raising insurance payouts for farmers to protect them as they restore their herds. — Gillian M. Cortez

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