A study commissioned by the National Economic and Development Authority shows high tariff on corn imports in the Philippines was a driving force in the increased cost of producing local livestock and poultry.
The study was conducted to benchmark the performance of the domestic livestock, poultry and dairy producers against those of China, Thailand and Vietnam,
Corn is a major ingredient of feeds for both swine and poultry, and the Philippines is unable to benefit from the low cost of imported corn owing to high tariffs of 50 percent for out-quota imports and 35 percent for in-quota (minimum access volume) imports, currently set at 217,000 tons, according to the Philippine Institute for Development Studies.
The Philippines in the last decade paid for the upper range of corn prices at $0.42 to $0.44 per kilogram, while China’s purchase price was only at $0.28 to $0.38 per kg., Vietnam at $0.22 to $0.29 per kg. and Thailand at $0.19 to $0.24 per kg.
The study, conducted in cooperation with the Southeast Asian Regional Center, showed that the cost of producing swine in the Philippines at P112.40 per kilogram of carcass weight was the highest among the countries covered, with that in Thailand at P99.16. The study also pointed out that the feed cost per kilogram in the Philippines was P64, compared with P54.54 in Thailand.
For commercial scale broiler farms, the cost per unit of broiler was highest in the Philippines at P92.40, and the lowest in Vietnam at P56.04. The share of feeds in the total production cost in the Philippines was 65 percent, while that in Vietnam was just 41 percent.
Topping the recommendations made by PIDS in the study was the need to undertake a comprehensive review of trade policies affecting the value chain to support greater competitiveness of the livestock, poultry and dairy industries.
The study also stressed that the government should earmark collections from tariffs on pork and chicken imports for funding of regulatory services and production support and for investment in research and data collection as inputs to policy and program development.
The Philippine Association of Feed Millers Inc. and the more than 400 small- and medium-scale animal feed producers in the country reiterated the need to review the current high tariff rates on corn at a time when global supply was tight, local production was lower and prices of both local and imported corn increased by double digits.
Feed millers are seeking better government interventions that would bring investments into the economy’s value chain of corn farms, feed milling and livestock growing to support food security while raising the potential of all the stakeholders to increase their contributions to economic growth.