Higher taxes on offal seen good weapon vs smuggling

DAGUPAN CITY—Local hog and poultry industry leaders have asked Congress to tighten government controls over the importation of offal (innards and low-grade meat parts) by imposing a 35-percent tariff on these products to curb meat smuggling.

In a position paper submitted to Butil Rep. Agapito Guanlao, chair of the House special committee on food security, Rosendo So, Swine Development Council (SDC) director, said meat importers are taking advantage of the low tariff rate of 5 to 10 percent for swine liver and edible offal and use this rate on imported prime meat cuts.

“Good meat products, which have higher tariff of 35 percent, are being declared as offal so they will pay only 5- to 10-percent tariff,” said So, also chair of the party-list group Abono.

“We are certain that a 35-percent tariff on offal, even if it’s meant for processing, will not hurt the processors given that offal has always been priced the lowest by exporters,” he said.

SDC leaders also recommended that the government regulate and restrict the importation of swine liver and offal through a system of accreditation of traders and processors, and for importers to declare in advance the volume of imports.

“We want to state clearly that this is not in restraint of trade, as importers may want to assail it categorically. In fact, in some regional economies, more particularly in Thailand, governments will first seek the approval of their local livestock industry before a proposed volume of imports could proceed,” So said.

Citing international trade data for 2011, So said there was a huge discrepancy of more than 73 million kilograms of offal that entered the Philippines.

“If these imported meat products were really offal, where did they go when the data showed the largest processors of meat products imported the least of this volume, while the smallest, least-known traders top the list of [firms] importing most of that volume?” he said.

In a separate position paper sent to the Senate, local hog raisers said illegal meat imports have been killing backyard farms in the country.

“In 2009, backyard farms contributed 71 percent of the total swine inventory while commercial farms contributed 29 percent. But in January 2012, the share of swine inventory from backyard farms went down to 67 percent while the commercial farms had a 33-percent share,” they said.