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LOCAL
meat processors warned on Thursday that the prices of
processed meat products like hotdogs and canned products
like meat loaf will go up by as much as 20 percent due
to a new Department of Agriculture (DA) policy limiting
the raw materials that the meat processing industry can
import for their production.
In
separate letters to Agriculture Secretary Arthur C. Yap
and Undersecretary Bernie Fondevilla, who is also the
executive director of the Minimum Access Volume (MAV)
Secretariat, the Philippine Association of Meat
Processors Inc. (Pampi) said the new policy “will impact
directly and immediately [on] the increase of food
prices, especially at this time, when alternative
sources of food materials are badly required.”
Fondevilla’s office had disallowed further issuances of
the required MAV Import Clearance (Mavic) effective
April 1, and decided to allocate 50 percent of the MAV
to livestock producers, leaving only 40 percent to
importers/processors; with the remaining 10 percent to
government as a discretionary volume for price
stabilization purposes.
MAV
refers to the minimum volume for specific agricultural
products that member-countries of the World Trade
Organization (WTO) can import with lower tariff.
Importations in excess of MAV are still allowed albeit
at a higher tariff rate.
“Because
the Mavics have been refused us, the added costs of our
importations will now definitely lead to price increases
almost at all levels,” wrote Pampi Executive Director
Francisco Buencamino.
Minus
the Mavic, meat processors will have to pay the
out-quota rate of 40 percent slapped on pork products.
The in-quota tariff rate for pork products is set at 30
percent.
For
2008, Buencamino said the government will allow 53,000
metric tons (MT) of pork products to enter the
Philippines at a reduced tariff rate.
The cost
increase in canned meat and processed food products,
Buencamino noted, will be aggravated by the increase in
the price of tin can, which has so far already risen by
30 percent.
Buencamino noted that the DA issued the new rule, even
after consulting the local meat processors on October
22, 2007, when Pampi first expressed its concern about
the eligibility of producer groups for inclusion in the
importation program.
“Their
eligibility into the program will unavoidably convert
them into a trading group, departing from being a
producers group,” he said.
Pampi
said granting livestock producers a MAV license would
result in these groups managing the situation to produce
a shortage of a MAV products for the purpose of pushing
final cost of products in the market higher, or to
purposely block any product in order create a domestic
market shortage—again for the purpose of jacking up
prices.
The new
MAV policy, said Pampi, will eventually discourage
livestock producers from attempting to improve their
industry practices, because trading would appear to be
more lucrative than animal husbandry.
Finally,
Pampi said the unilateral reduction of allowable MAV
volumes earlier available to importers/processors is
also tantamount to abuse of authority by a government
office against free enterprise through direct
intervention.
The
group vowed to oppose the new policy “by whatever means
and to go wherever it takes us because the injury to our
industry that this provision will cause is clear,
imminent and absolute.”
Pampi is
composed of 31 member-companies, including San Miguel
Foods Corp., with annual production of about 600 million
kilos of meat products worth over P80 billion. The
association, which groups the largest meat processors in
the country, directly employs 35,000 Filipinos and
provides indirect employment to 50,000 others. |
