November 29, 2012

Hog and poultry raisers in the Philippines cried foul over the decision to grant fiscal incentives to the integrated production project of a Thai company that poses a threat to the viability of local players.

In a statement, civic and party-list groups said the BOI erred in approving the registration of Thai firm Charoen Pokphand (CP) for its PHP2.32-billion (US$56.72 million) integrated farm facility.

CP is setting up parent stock farms in Concepcion, Tarlac, and Floridablanca, Pangasinan, as well as six broiler farms in Bulacan and Nueva Ecija that will begin operations in February 2013.

Rosendo So, Abono Party-list chairman and Swine Development Council (SWD) director, said the board's move will kill the domestic swine and chicken industries, which have yet to fully recover from rampant meat smuggling that resulted in losses of as much as PHP28.5 billion (US$696.86 million) in the past three years.

With the of the project by the Board of Investments, which has an annual stock capacity of 25,453 heads for parent stock and 3,647 tonnes for slaughter hogs, and 21,847 tonnes chicken, this will no doubt lead to the local industries' eventual collapse, So said.

According to him, the huge proportion of meat products that the Thai company will flood the local market is expected to annihilate backyard, small and medium growers.

With the Aquino administration's approval of the investment of CP in the swine and poultry sectors, it has effectively signed the death sentence of the local growers, So said, adding local farmers cannot compete with a multi-national company like CP because the state is not all out in helping them. He warned that some 7 million Filipinos working in the agri-business sector could also be displaced.

Worse, the chairman said local growers would not enjoy the luxury of tax holidays given to CP.

CP will enjoy an income tax holiday, exemption in the payment of taxes and duties on imported breeding stocks and genetic materials within 10 years from commercial operation.

Agricultural Sector Alliance of Philippines (Agap) Party-list Rep. Nicanor Briones said the BOI's move might also violate the country's existing anti-dumping laws.

With BOI's approval of CP investment in the area of agri-business, Briones said the anti-dumping law has become useless as it allowed CP to effectively dominate the market, to the prejudice of the local hog and poultry industry.

Republic Act 8752, or the Anti-Dumping Act of 1999, provides protection to a domestic industry that is being injured, or is likely to be injured by the dumping of products imported into or sold in the country.

The project is already CP's third in the country, following its recent investment in aqua feeds and breeder and slaughter hogs.

So said the livestock industry provided millions of employment to Filipinos nationwide, even if the government has not subsidized its operations.

Meanwhile, the Pork Producers Federation of the Philippines (Propork) also protested the granting of incentives to CP.

[This] will surely kill our backyard and commercial hog raisers and they should also grant local producers the same incentives, said Propork President Edwin Chen.

He lamented that the incentives were granted after Propork drafted a road map or blueprint for sustaining the local hog sector's growth.

Chen also said the granting of the income tax holiday came at a time when the local hog sector is facing problems of outright and technical smuggling.

Hog raisers have complained that technical smugglers are able to avail themselves of the lower tariff of 5 percent of pork offal by declaring prime meat as such.

The prime meat cut is typically hidden behind offal, or innards that are used by food manufacturers as extenders.