The government needs to immediately act on the rising prices of pork and chicken by bringing in additional supply of corn, a primary feed component, as local output of the commodity may not be able to fill the demand.
Several industry stakeholders are in unison in asking the Department of Agriculture to hike the country’s corn imports to fill up the shortfall in local supply and the more expensive feed wheat.
Right now, corn tariffs have been reduced to five percent for in-quota volume and 15 percent for out-quota volume.
American Chamber of Commerce Agribusiness Committee chairman Christopher Ilagan said this supports the hog sector which now has the flexibility of sourcing corn as an alternative feed ingredient at price competitive rates.
But such a measure may not be enough to make major impact on the current prices in the market.
“The minimum access volume (MAV) should be expanded from the current 217,000 metric tons to a level more in line with the actual energy deficit in the country today, which is closer to three to four million MT,” Ilagan said.
“Considering half a year has already gone, the administration may consider even a two million MT MAV so that the five tariff rate would apply and our local buyers can buy competitively from the global market,” he said.
The Philippine Association of Feed Millers Inc. (PAFMI) concurred with this, saying expanding the MAV would give the feed industry enough flexibility to produce the country’s requirements for the second semester.
PAFMI is also asking President Marcos, who is the concurrent Agriculture Secretary, to prioritize end-users in the allocation of imported feed corn under the MAV Plus in order to reach feed millers and mixers in a shorter time.
“Prioritizing end-users in the allocation of corn under the MAV Plus will shorten the process distribution and help temper the rise in prices,” PAFMI said.
Unfortunately, the DA has yet to decide on the requests of the industry.
Agriculture undersecretary and chief-of-staff Leocadio Sebastian admitted that the Philippines is only about 60 percent sufficient in corn, thus, the need to ramp up production.
Last year, corn production only reached six million MT, short of the over nine million MT total demand. Further decline in output may be expected this year amid costlier fertilizers in the global market.
“We need to focus on improving the corn quality to be competitive with imported corn. The shortfall is usually filled up by feed wheat importation,” Sebastian said.
In its recent meeting with Marcos, no concrete discussions were made as to corn importation.
“What was discussed was how to accelerate implementation of corn programs, activities, and production to support output,” he said.
Bounty Agro Ventures Inc. (BAVI), the country’s largest rotisserie chicken company, suggested that liberalizing the corn industry, just like rice, is the solution.
“Corn tariffication like rice is the immediate solution,” BAVI president and general manager Ronald Mascariñas said.
Over the long term, Mascariñas added that there is a need to help corn farmers improve productivity by subsidizing hybrid seeds and fertilizers.
He emphasized that higher productivity of corn farms will stabilize prices and eventually benefit the livestock and poultry producers.
It should be noted that higher corn prices, in turn, increase the cost of poultry production where feed costs can cost as much as 70 percent of raising a chicken. Of that, 50 to 60 percent of the feed’s composition is largely corn.
“Poultry prefers to stick to corn because, among other things, corn produces the consumer-preferred pigmentation of chicken products sold in the market,” Ilagan said.
In terms of legislation, Ilagan is hoping that lawmakers will pass the Livestock Industry Development and Competitiveness Bill which seeks to rationalize the DA organization along the lines of the corn-livestock-poultry value chain.
It also aims to establish a Competitiveness Enhancement Fund for the livestock, poultry, and corn sectors.
“This will hopefully allocate much-needed funds to help develop and improve the competitiveness of these sectors, while also earmarking tariff collections on these imported commodities for the development of these specific sectors – often neglected in favor of what has been a rice-centric agriculture policy,” Ilagan said.
“It will also help rationalize the tariff levels that balance continued accessibility and affordability of these globally traded commodities while at the same time providing an environment that will enhance the competitiveness of these local commodity sectors,” he said.
The industry’s calls are made amid the continued increase in chicken prices with further hikes expected if corn imports are further delayed. PR