"Food security has always been one of the top national concerns of the people."
"Food security has always been one of the top national concerns of the people."
The pandemic has plunged the whole Luzon island in lockdown, triggering a sudden drop in demand of all commodities and services and practically slamming the breaks on what has been an unprecedented economic velocity for the country. As the government continues its daily guideline tweaks to address some harmful nuances in implementation, the uninterrupted supply of food carries critical urgency because its failure has a real destabilizing potential.
Recent news articles quoted the Department of Agriculture reporting a total of 251,450 pigs culled since the African Swine Flu (ASF) outbreak, but industry claims it is lower by their estimates. The ASF also scared consumers who then shifted to chicken and dropping demand by four percent to 1.729 million Metric Tons from 1.806 million MT.
The DA also said that chicken meat imports will increase by one percent to 370,000 MT compared to 366,000 MT last year. It said that local production, though estimated to increase by 10 percent (1.6 million MT), will not be enough to meet domestic consumption predicted to be at 1.89 million MT. This takes to account lower and delayed shipments in this year’s chicken meat importation because of disruptions from the lockdown.
This conflicts with latest news reports citing DA forecasts based on inputs from hog and poultry industry stakeholders projecting that seven regions will produce more pork than their requirements and 11 regions will have chicken surplus throughout the year.
On the other hand, the pork and chicken industries are calling for a halt of all importation and to stop the issuance of new import permits because of the reported oversupply.
According to industry sources, the current numbers of frozen inventory of chicken is already at 60.3 million kg, of which 35.3 million kg are imported and 25 million kg are locally produced. These figures are 4 million kg higher than the numbers posted by the National Meat Inspection Service.
The pork industry likewise called for a stop in importations for the remaining quarters of the year owing to the plentiful buffer stocks and the drastic drop in demand because of the ongoing Enhanced Community Quarantine (ECQ). Furthermore, the reported surplus of pork meat in Visayas and Mindanao could possibly be sent to Luzon to augment the supply.
The Philippines has a World Trade Organization agreement that requires a minimum access volume (MAV) commitment in the importation of chicken and pork meat. In 2018, MAV for pork is 54,210,000 kilos while chicken meat at 23,490,000 kilos.
However, 2018 pork importation reached 387,895,977 kilos, way over the MAV allocation by 333,685,977 kilos while chicken imports reached 310,851,343 kilos, likewise exceeding MAV allocation by a whopping 287,361,343 kilos.
This is a clear indication of over-importation and the lack of government safeguard mechanisms resulting in falling prices that threaten the viability of chicken and hog producers.
Atty. Bong Inciong of the United Broilers Association suggests that in this crisis situation, the Philippines should suspend compliance with its commitment to the WTO and instead maximize the current local supply. He further points out that aside from the WTO agreement, there is a bilateral agreement between the Philippines and the US regarding the market access of chicken importation wherein a portion is allotted for the US chicken and proposes to import corn instead which would help lower feed costs and eventually lower retail price for consumers.
Moreover, the industry wants to be allowed to import corn from non-ASEAN countries at lower tariff rates to help in lowering the cost of animal inputs. The lowering of the feed ingredients will help the livestock producers in lowering their cost to produce, increasing their competitiveness in the market.
The feed millers are willing to help out the local farmers by buying their local produce and buying from the non-ASEAN countries during off-harvest season. The tariff that will be collected will be allocated to the local farmers for their post-harvest facilities and advancement in corn farming.
There are several ECQ related factors that are currently affecting the industry such as additional charges on importation because of the slow process of Customs releasing. Industry sources say that importers are already experiencing slow releasing at the port resulting to additional charges on storage, detention and demurrage. They suggest that these charges incurred during the ECQ period should be waived or at least discounted.
The pork and chicken industry, now hurting because of an artificial drop in demand, suggests measures that would address distribution and retail problems such as the extension of shipping permits within Luzon, stimulus packages such as tax incentives or holidays, increasing market hours to accommodate more consumers, and to resume operations of fastfoods, drive-throughs and deliveries to increase the food demand while complying with social distancing.