Published on August 15th, 2012 | by Ina Silverio0
Philippine Meat Industry Seriously Threatened by Massive, Illegal Imports
The Philippine House of Representatives’ Chairman of the Small Business Enterprises Development Committee sounded the alarm on a growing national concern. This is all in regards to the unhampered importation and rampant smuggling of meat in the country, as he says that this may lead to the bankruptcy of local hog raisers.
‘Bayan Muna‘ Partylist Rep. Teddy Casiño said that the amount of imported meat increased in the last few years, despite a steady supply from domestic producers. He said that in 2008, imported pork was at 109.36 million kilos. This amount increased by 48.32 percent in 2011, with 162.21 million kilos imported. Meanwhile, imported chicken rose by 177.98 percent from 45.77 million kilos in 2008 to 127.23 kilos in 2011.
“Based on our consultation with local hog and poultry raisers, farm gate prices from July 2011 to February 2012 averaged P86 (US$2) per kilo against production cost of P92 (US$2.13) . An estimated P8.5 billion (US$197,674,418,605) was lost in the eight month-period, with 2.2 million hogs sold each month. With this they are operating at a lost due to the unfair advantage of imported meat,” said Casiño.
In March 28 this year, a group of hog and poultry raisers released a paid advertisement in the Philippine Daily Inquirer calling on President Benigno Aquino to address the concerns of the sector. The group said that local hog and poultry raisers have been losing substantially because of the falling prices caused by the dumping of imported meat. The group is composed of almost 50 local associations, all denouncing the egregious situation.
At the same time, the hog and poultry raisers criticized the administration for reportedly giving into the lobbying efforts of American companies. These organizations had gone against the Department of Agriculture’s ‘Administrative Order no. 22, Series 2010, which tackled the ‘Rules and Regulations in the Handling of Frozen and Chilled Meat Products’ in the Markets. Based on reports, AO 22 had helped limit the importation of US poultry and meat since it mandated the refrigeration, traceability, labeling and packaging of frozen meat.
Importers and US suppliers complained that the AO gave the domestic pork producers an edge. Recently, however, the DA replaced it with AO 5, which refers to the Handling of Newly Slaughtered Meat in Markets; and AO 6 which refers to the Hygienic Handling of Chilled, Frozen and Thawed Meat in Meat Markets.
“AO 5 is disadvantageous to local producers because of a mandated eight-hour shelf life from the slaughterhouse while AO 6 removed the pre-wrapping and thawing requirement,” said Casiño. “While the DA explained that AO 22 did not have necessary consultation, the same can be said for AO 5 and 6. The government should at least hold a dialogue with local hog and poultry raisers to address their concerns affecting the local industry and the consuming public. Congress should come up with legislative measures that will help the industry prosper.”
The ‘Bayan Muna’ lawmaker also filed House Resolution 2345 to investigate the Aquino administration for succumbing to the Americans’ lobbying efforts against AO 22. Importers and US suppliers complained that the AO gave the domestic pork producers an edge.
In a related development, agriculture Secretary Proceso Alcala has ben forced to to defend Malacañang’s inaction on the claims of local hog and poultry raisers. Last April 21, Alcala said that President Aquino deliberately ignore the 21st Annual Convention of the National Federation of Hog Raisers Inc. (NFHFI) and Pork Producers Federation of the Philippines Inc. (ProPork) in Mandaue City as was reported in the media. Alacala said that Aquino has already instructed him and other heads of agencies including the Bureau of Customs (BoC) to address the hog raisers’ concerns and make the local swine industry globally competitive. During the said convention, the stakeholders discussed issues affecting the sector, including technical smuggling which they said translates to P8.5 billion losses in an eight-month period, considering the 2.2 million hogs sold per month both from commercial and backyard raisers.
Edwin Chen, Swine Development Council (SDC) director and president of the Pork Producers Federation of the Philippines, said that the Boc and the and the Bureau of Animal Industry (BAI) allows the misdeclaration of meats by importers. He said the importation of pork, including frozen meat, has steadily increased from 109.37 million kilos in 2008 to 169.22 million kilos in 2011 with the highest recorded at 178.91 million kilos in 2010.
“Imagine, for a one 20-foot container of 25,000 kilograms of choice pork, the importers misdeclare the meat as offal and only pay a tariff of five percent or only P40,000 (US$930) instead of the P650,000 (US$15,116) at 35 percent tariff,” he said.
In the meantime, Durian Tan, SDC director and treasurer of the NFHFI said that in for the last two years, they have issued appeals to the government on the matter, but they recieved no response. “We have raised our concerns through frequent dialogues with the DA officials and paid advertisements in three big newspapers but no action was undertaken. This time, we hope the President would help save the dying and losing local meat industry,” she said.
The NFHFI and ProPork have already issued a warning that they might be forced to hold week-long holiday, cutting the country’s supply of pork and chicken, if the government does not put a stop to what they said was the massive illegal entry of imported meat. ABONO party-list chairman Rosendo So has also said that the hog and poultry sectors in a “panic selling” mode.” In a report in Interaksyon5, So was quoted as saying that several commercial farms in Pangasinan, Pampanga, Angeles and Bulacan are now up for sale. “These farms have 3,000 to 5,000 heads. There are 10 farms being sold in Bulacan alone,” he said.
In the same report, SDC director and president of the Central Visayas Pork Producers Cooperative Rolando Tombago was also quoted as saying that several farms in Central Visayas were also laying off their workers to cut cost. He said that in Central Visayas, there are 33 commercial farms and one of the biggest, the the Dumanhog Farm with 5,000 heads, is up for sale.
In a June 2011 paper by Florence Mojica-Sevilla, senior agribusiness specialist of the Center for Food and Agri Business of the University of Asia and the Pacific, it was said that the country’s importation policy on meat products was causing problems for local raisers. “The local hog sector is focused on serving the fresh meat requirements of the wet market, which accounts for 80 percent of the total market. Meanwhile, meat processors import to meet their requirements for processed meat products. Higher cost of local pork and the inability of the industry to produce lean and fat trimmings have resulted to the importation of pork and buffalo meat,” she said.
According to Sevilla, local hog raisers are experiencing losses because of the uncontrolled entry of frozen meat imports into the country. “They want the practice to stop and is urging the government to provide safeguards to keep them in the business,” she adds.
Sevilla also explained that the government allows pork importation to plug domestic shortages especially during times of calamities and disease incidences. “Imported pork products, however, are meant mainly for use by the processing sector and not intended for sale in the wet market. There are reports, however, that imported pork is now being sold in the wet markets not only in Metro Manila but in big cities like Cebu, Davao, and Cagayan de Oro.”
She continues to explain that there are vendors who thaw the imported pork, mix it with the local slaughtered pork, and pass it off as fresh pork in the wet markets. “An inherent advantage of local pork is the domestic market’s preference for fresh meat. Customers who go to the wet markets to buy warm meat may end up purchasing imported pork without noticing the difference,” she said.
There have also been complaints about the influx of cheap pork offal, which is making its way into the wet market. Pork offal refer to parts usually discarded as waste or set aside for use in meat by-products, including the tail, hooves, blood, head, brain, heart and liver. Sevilla documented in her research that local producers claim on pork offal importation is a cover by meat importers to smuggle choice pork cuts into the country. This is affecting the sales of local pork, thereby hurting the industry.
“Imported pork is supposed to be supplied only to meat processors. However, it is being reportedly sold in the wet markets. Moreover, hog raisers assert that the huge amount of imports of pork offal, including fats and skin, has created more competition. Pork offal, made from pork innards, which has little value in the exporting countries, is sold at very low prices. Imported pork skin, for example, is much cheaper at about P50 (US$1.162) per kilogram than locally-produced pork cuts priced at around P160-P180/kg. (US$3.72 – US$4.18) Hog raisers have complained that the sale of imported pork offals – pig lips, cheeks, head and liver – in the wet markets is dampening demand for local pork. Aside from these, pork bellies and deboned meat that are entering the country also compete with local pork,” she said.
The agricultural analyst said that meat processors clamor for the continued importation of offal since the local hog producers have not developed a market for offals. “The practice is to sell whole hogs and therefore, local producers cannot compete with those selling by-products such as offals. Looking at price competitiveness, however, Philippine pork is competitive with imports,” she said. Increasing Prices of Meat Products According to data from the Bureau of Animal Industry (BAI), the average prices of pigue (ham) and liempo (thigh area) in Metro Manila public markets increased by only P1.00 (US$0.023) and P1.09 (US$0.025) per kilogram in February and January. Pigue and liempo were priced at P169.79 (US$3.95) and P178.66 (US$4.16) per kilo respectively. Chicken parts like wings and legs were sold at an average of P132.65/kilo (US$3.09) in February. This was higher than the P131.47 (US$3.04) and P131.40 respectively the previous month. Chicken breasts, in the meantime, sold at at an average of P131.68/kilo (US$3.06) . This was higher by P1.00 compared to prices in January. The average price per kilo of beef has been pegged at P263.39/kilo (US$6.12).
Feature Photo Source: here