‘Govt must also import pork to make market competitive’

TO help stabilize prices and maintain market competition, an economist-lawmaker on Wednesday said the government must also be temporarily allowed to import pork at the new reduced tariff rates.

Marikina Rep. Stella Luz Quimbo said reducing tariffs as a way to reduce market prices of pork makes perfect “economic sense,” but it also requires markets to be perfectly competitive.

“If government is allowed to import pork at the new reduced tariffs and sell directly to the consumers, then importers will now face competition. is is one way to ensure that reduced tariffs will translate to lower prices in the markets. Otherwise, importers can simply purchase low and continue to sell high in the market, especially if they engage in anti-competitive practices such as price fixing,” she said.

“In a less than perfect situation, reducing tariffs alone may not work. Government must be part of the solution it must be temporarily allowed to import pork to help stabilize prices,” added Quimbo.

Earlier, President Duterte issued Executive Order 128 lowering tariff rates on fresh, chilled or frozen pork.

Moreover, Quimbo said the government must also provide cash assistance to domestic hog raisers to repopulate their hogs and to support investments needed so they can better compete with imported pork.

“Competition is key in making reduced tariffs pro-people,” she added.

MEANWHILE, Quimbo reiterated her request to the Department of Agriculture to submit the “basis” of the proposal lowering tariffs on pork products to the lower chamber. “ere are three questions though that remain unanswered, hence, the policy issuance is arguably premature. First, what is the basis of the parallel proposal to increase the MAV by 645 percent? Considering that only 70 percent of the current MAV is utilized, there does not seem to be the need to expand MAV by a substantial amount, way more than the estimated shortage of about 150,000 metric tons,” said Quimbo.

“If the landed cost of a kilo of imported pork is about P145, with a tariff rate of 30 percent and distribution costs of about P50, plus margins, pork imported within the MAV can sell at about P280 per kilo. is means that importers can very well undercut domestically supplied pork. Retail prices today average almost P400 per kilo—record high levels brought about by the supply disruptions caused by ASF and the series of typhoons last year,” Quimbo added.

Second, Quimbo also asked the DA to explain the basis for setting the new tariff rates.

“Why 5 to 10 percent? Why not 10 to 20 percent? Or 15 to 25 percent? A straightforward computation shows that even at 10 percent, imported pork can sell at P250 per kilo, assuming a retail margin of 10 percent. Are we assured that 5 to 10 percent are the appropriate rates to return inflation for the food sector to pre-asf levels?” she asked. Several lawmakers have already urged President Duterte to reconsider his decision to lower import duties on pork meat from 40 percent to 15 percent for outquota pork, and from 30 percent to 5 percent for in-quota pork imports. See banner story on A1.

ird, Quimbo also wants the DA to explain how the reduced tariff rates will affect the local hog raisers.

“Can our local hog raisers compete against the very cheap imported pork? Will farm-gate prices of pork drop substantially more than the drop in the selling price of pork in retail markets?” she said.

“e Philippine Competition Commission has the mandate of looking into this important issue. But while we wait for the PCC to take action, hopefully the government will be allowed to import pork to provide competition among pork importers,” she added.