October 18, 2006

Philippines' may cut chicken import duties for Christmas

THE Philippines' Department of Agriculture is asking for a suspension of special taxes on chicken imports in November and December to ensure enough supply during the Christmas season, with local production expected to drop because of damages brought by Typhoon "Milenyo".

The department wants implementation of a special safeguard mechanism (SSM) suspended for importing 3,000  tonnes of chicken from Nov 20 to Dec 25, Agriculture Undersecretary Segfredo Serrano told the Philippine Daily Inquirer.

The SSM, a mechanism adopted under the World Trade Organization, imposes an additional duty of P10-P30 (US$0.2 to US$0.6) per kilogramme of chicken when landed costs  falls below P93.96 (US$1.88) a kilogramme. This is on top of a 40 percent regular tariff on chicken imports.

Serrano said the SSM is aimed at preventing undue competition from cheap imports and erosion of chicken prices.

However, it has to be suspended in the next two months to address a possible supply shortfall during the holidays, Serrano said. He added the damages inflicted by the typhoon would  have severe impact on local supply and consumer prices.

He said all imports would still be subject to the regular 40 percent tariff, whether within or outside the minimum access volume (MAV) of 23,490  tonnes allowed this year.

As of September, 16,544  tonnes of chickens were imported under the MAV quota.

Bureau of Animal Industry Director Davinio Catbagan said backyard and commercial poultry raisers recognized the the recent typhoon's impact on chicken supply  and fully supported the proposal to suspend the SSM.