March 8, 2005

 

Philippine poultry raisers seek extension of MAV on chicken imports

 

 

Philippines' biggest poultry integrators want the government to extend the minimum access volume (MAV) for imported chicken which expires in June this year.

 

"The local poultry industry at this point still needs to be shielded from cheap imported chicken. Without the MAV, any- body can just import the volume they want to bring in and at prices lower than locally-produced chicken. A free-for-all regime will definitely have adverse repercussions for our domestic broiler growers," said Ruben Pascual, spokesperson of the Philippine Association of Broiler Integrators (PABI) and head of the Poultry Export Board.

 

MAV refers to volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act.

 

In the last three years, MAV utilization for poultry averaged 80 per cent with practically all of the country's poultry meat imports falling under MAV.

 

Pascual pointed out that the Department of Agriculture (DA) which, along with the Department of Health, PABI, and the United Broiler Raisers Association (UBRA) is spearheading the Avian Influenza Protection Program (AIPP), should integrate the MAV extension into the program.

 

"Imposing a MAV extension is also one way to prevent the contamination of local poultry herd with the bird flu virus that could be brought into the country by chicken exporters from countries infested with the bird flu plague," said Pascual.

 

Pascual added that the threat of a bird flu coming into the country should be taken seriously, especially since the Philippines is one of few countries in the region that has managed to keep avian influenza from entering its shores.

 

As a result, the Philippines is being sought out by several countries in Asia as a new source of whole-dressed and cut-up chicken parts.

 

Rita Palabyab, PABI president, said chicken exports this year is expected to reach eight million kilos from only 1.5 million kilos in 2004. Exporters such as San Miguel Foods Inc., Swift Foods Inc. and Tyson Agro Ventures have been shipping value-added chicken cut-ups to Japan, the world's second biggest importer of chicken. Japan previously imported its requirements from Thailand.

 

"It doesn't look like the export market is going to dry up soon because we have also inquiries from Hong Kong and South Korea, among others. Our share in the market is still very small but it is a foot in the door which we want to protect," said Palabyab

 

Previously, Agriculture Undersecretary Cesar Drilon said the DA has already sought the opinion of the Department of Justice (DOJ) on the MAV issue.

 

"Under the WTO, the old MAV mechanism can still be implemented until such time that a new trade agreement is created. However, under the Agricultural Competitiveness Enhancement Fund or ACEF, the MAV expires 10 years after its enforcement and this falls on June 30 this year," noted Drilon.

 

ACEF was one the safety nets created by Congress to shield the local agriculture sector when the Philippines opted to liberalize trade as part of its commitment to the Uruguay Round.

 

UBRA president Gregorio San Diego said previously that the local broiler sector will not be competitive if the MAV is lifted.

 

"Even with the MAV in place, we are already having a difficult time. Every time word gets out that chicken imports will increase, our farm gate prices go down and our smaller members depopulate to cut their losses only to regret this later when prices improve with tight supply because the importers decide to stop buying temporarily from their foreign suppliers if world market prices are high," said San Diego.

 

He noted that the influx of cheap imported chicken has also kept local growers from planning production and keeping prices steady.

 

"It is hard to plan when there is no predictability in the market," added San Diego.