The agribusiness knowledge provider
August 17, 2009


Tariff reduction on Philippine pork, poultry products sought


An alliance of agriculture organizations in the Philippines has asked President Gloria Arroyo to defer the reduction of poultry and swine tariffs to 0 - 5 percent  in 2010 under the AFTA-CEPT (Asean Free Trade Agreement-Common Effective Preferential Tariff) agreement. The current tariffs of poultry and swine are 40 percent and 35 percent, respectively.


Alyansa Agrikultura is composed of federations and organizations representing all agricultural sectors.


In an August 10 letter to the president, the group urged the Philippine government to adopt the original position by the Department of Agriculture taken last April that the government seek a 5-year suspension of full implementation of tariff cuts in 2010 under the AFTA-CEPT scheme.


However, the Alyansa was informed that this could not take place.


The Alyansa commended the Philippine government for asking exemptions for the 0 to 5 percent tariff imposition for rice and sugar, but requested that this Philippine position be expanded to include at least poultry and swine for exemption.


According to the United Broilers and Raisers Association (UBRA), the farm gate price for live chicken in the Philippines is P66/kg (US$1.36), which is 41 percent higher than Thailand's P48/kg.


The National Confederation of Hog Farmers Inc. (NCHFI), meanwhile, said that the farm gate price of swine in the Philippines is P85/kg, which is 38 percent higher than Thailand's P60/kg.


Though the current AFTA-CEPT rates of 40 percent and 35 percent for poultry and swine give adequate protection for these sectors, drastically and suddenly reducing these rates to 0 to 5 percent less than five months from now would jeopardize the livelihoods of the poultry and swine producers at a time when jobs are scarce and poverty is increasing, Alyansa Agrikultura Chair Ernesto Ordonez said.


Statistics provided by Alyansa's Salvador Umengan show that ASEAN countries export 2.4 million tonnes of chicken per year, and import 404,000 tonnes. For swine, AFTA countries export 570,000 tonnes and import 80,000 tonnes.


Ordonez said the ASEAN exporters for poultry and swine are likely to target the Philippine market, because the new 0 to 5 percent tariffs will render local poultry and swine producers at a great price disadvantage. The 0 to 5 percent tariff rate is a good goal, but Ordonez said the Philippines need a deferment of its implementation to get the needed time to adjust to this challenge and save our farmers' existing jobs.


US$1 = PHP48.30 (August 17)

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