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Thursday, May 25, 2006
Dairy farms seeks hike in tariff on foreign milk
Dairy farmers in the country are demanding the government to raise importation tariffs on liquid milk and to release funds, mandated by law, for the development of the local dairy industry.
They also want government to correct the alleged “mislabeling” of liquid milk products.
These, and with appropriate support from government, will make dairy farming a “very profitable” business, said Dairy Confederation of the Philippines (Dairycon) chairman Jose Vicente Tarnate.
Tarnate, together with major players in the national dairy industry, held a press conference yesterday shortly before the opening of the ninth Dairy Congress and Expo at the Grand Convention Center.
Heavy influx
Danilo Fausto, president of DVF Dairy Farm Inc. in Talavera, Nueva Ecija, said the low tariff rates on imported milk and dairy products in the country causes a heavy influx of such goods into the Philippines, “drowning the marketability of locally produced milk and pushes aside local milk producers.”
He said the country imposes a one- to three-percent tariff on imported milk and dairy products, even though it is allowed under the General Agreements on Tariffs and Trade to impose up to 18 percent.
Other Asian countries, such as Thailand, Vietnam, China and India, impose importation tariff rates ranging between 20 percent and 60 percent.
“Among Asian countries, (the Philippines) is the least concerned with protecting its own dairy industry in terms of using tariff as shield. (It) is the lone country that has single digit tariff on milk and milk products,” Fausto said during the press conference.
He said the dairy industry wants the government to impose an 18-percent tariff on imported liquid milk.
National Dairy Authority operations manager Rene de Guzman said liquid milk make up two to three percent of total imports of milk and dairy products, which cost about $492 million in 2004.
Liquid milk
He said about 1.8 million to two million liters of liquid milk are imported by the country.
Dairycon vice chairman Antonio Manikan, however, clarified that the industry is demanding that the tariff increase be imposed only on imported liquid milk but not on powdered milk, as the sector wants to avoid hurting low-income consumers who usually buy the powdered variety.
Tarnate said part of revenues from increased importation tariff rates will benefit the country’s dairy industry, make local milk prices competitive and fund the activities of the National Dairy Authority (NDA), which is mandated to assist dairy farmers.
The country’s dairy industry involves 9,400 families or 48,000 individual farmers and created about 17,000 jobs in rural areas.
Slow
While there is growing confidence in the industry, indicated by more than 180 local cooperatives that are now involved in the business of producing milk, national dairy development is moving very slowly.
Fausto said the number of milking animals in the country is “embarrassingly low” at less than 3,000 heads, compared to Thailand which has over 20,000 and India with over 90 million.
He proposed that the government put more funds to buy additional milking animals to boost milk production by private and cooperative farms.
“It can be a joint venture between government and private sector,” he said.
Tarnate, in an interview, said an imported milking animal costs about P90,000 per head.
Fausto said Republic Act 7884, the law that created the NDA in 1995, allots a dairy development fund of P200 million and augmentation support fund of P140 million a year for local dairy development.
Labels
But the P200 million was never put up and instead of P140 million, only an average of P48.8 million had been released every year, he added.
Dairycon officials stressed that the government should strictly enforce truth in labeling of liquid milk products.
“How can milk be called ‘fresh milk’ when it has been in a supermarket shelf for six to eight months? In some countries, this is illegal,” Fausto said.
He said real fresh milk is more nutritious than those that undergo ultra-heat treatment, which reduces the nutrient content of the product.
Tarnate said the government should also initiate a centralized marketing program of the national dairy industry.
If all these are achieved, he said the national dairy industry will be able to go a long way from where it is now. (LAP)
For Bisaya stories from Cebu. Click here. (May 25, 2006 issue)
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