Alliance rejects tariff cut on agri products
utting tariffs on agriculture products will not necessarily address the inflation, but would instead lead to the death of the agricultural industries, the five-coalition Agri-Fisheries Alliance (AFA) said on Friday.
Former Trade Undersecretary Ernesto Ordoñez, AFA convenor, said that the government’s proposal to abolish the 40 percent poultry tariff and the 35-40 percent hog tariff will lead to massive unemployment, discontent, and poverty.
AFA issued the statement after Socioeconomic Planning Secretary Ernesto Pernia of the National Economic and Development Authority (NEDA) disclosed over the week that the President is set to sign an executive order which will reduce tariffs on imported rice, vegetables, corn, wheat flour, and meat that includes poultry to help address inflation.
Inflation, which means an increase on the prices of goods and services, hit a fresh high of 5.7 percent last July.
Former President and now Speaker Gloria Macapagal Arroyo and other House leaders, with the President’s economic advisers, have proposed measures, including the reduction of tariffs on selected imported products, to address inflation.
But Ordoñez said abolishing or reducing tariffs on these products will not totally address inflation.
“Cutting tariffs on imported products may bring down inflation but not necessarily because often, you cut the price, the traders go to retailers, and retailers keep the price. But sometimes, there is. We cannot deny that. But at the cost of people losing their jobs and destroying the whole economy,” Ordoñez said during a press conference in Quezon City.
The AFA also opposed fish tariff elimination, saying that only fish importers and wholesale traders will benefit from it.
AFA said opening the floodgates to imported milkfish and tilapia at zero tariff will “irreparably damage the aquaculture industry” where thousands of stakeholders are dependent upon.
Edwin Chen, president of Pork Producers Federation, said that even if importers buy at a lower price, the retailers may not pass on the reduced prices to the consumers, limiting the inflation impact.
Chen cited recent experiences in which pork retail prices were held steady even if farm-gate prices already declined.
To help solve this, he recommended that the Department of Agriculture should implement suggested retail prices (SRPs), post retail prices,enforce the Price Tag Law, and penalizing offenders.
Meanwhile, Nikki Briones of the Agricultural Sector Alliance of the Philippines (AGAP) said that instead eliminating tariffs, the government should temporarily abolish value-added and excise taxes for some months.
“Tanggalin muna ang VAT at tax sa TRAIN law temporarily for three months. Dito, walang maapektuhang sektor at siguradong bababa ang inflation. Lahat makikinabang (VAT and taxes in TRAIN Law should be suspended for three months. Under this scheme, no sector will be affected and inflation is expected go down. Then everyone will benefit from it),” he said. Aside from eliminating agriculture tariffs, Ordoñez and leaders of the agricultural sector, including farmers and fisherfolk, also opposed another proposed anti-inflation measure.
The other proposed measure, which is to remove the 2 percent blend of Coconut Methyl Ester (CME) or Coco Biodiesel to bring down the current pump price of per liter, will have insignificant effect in the reduction of fuel prices, the group said.
“The net price of 1 percent CME today is only and 2 percent is just The reduction in fuel pump price will only be 0.66 percent or, for example, from per liter to per liter,” AFA stated.
The alliance stated that the measure will also significantly eliminate the benefits in mileage economy and air quality, citing findings of the Asian Institute of Petroleum Studies, Inc.