Philippine Association of Feed Millers Inc. (PAFMI) sees importation as a band aid solution or the “the best route to take” at the moment as Severe Tropical Storm Maring destroyed a significant amount of corn output.
Otherwise, consumers will have to deal with an increase in the price of animal feeds and ultimately, food.
In an email response to a query, PAFMI expressed concern that 'Maring', which wiped out corn production in several areas in the country, could result in deficit for the said commodity and could push prices not just of corn but also animal feeds.
“There is always that concern because even without the storm, we already face an annual deficit due to several factors, including the finite land area where corn can be grown and climate change which devastates crops through drought or storms,” PAFMI said.
“At the moment, Maring was responsible for an estimated over a billion worth of damage to rice and crops,” it added.
To be specific, corn comprises 60 to 70 percent of the ingredients for the production of animal feeds, while the cost of feeds can take up 80 percent of the production cost for chicken and other livestock products.
Latest report from the Department of Agriculture’s (DA) Disaster Risk Reduction and Management Council (DRRMC) showed that the damage and losses that the agriculture sector incurred from Maring surged from P1.17 billion as of Thursday evening last week to P1.9 billion as of the weekend.
The DA was so far able to take into account 60,195 affected farmers and fishermen from Cordillera Administrative Region, Ilocos Region, Cagayan Valley, Central Luzon, MIMAROPA, Bicol Region, Western Visayas, Central Visayas, and SOCCSKSARGEN.
For corn, as much as 8,624 metric tons (MT) of production was already wiped out, while 7,830 hectares were damaged.
PAFMI said that prior to the storm, corn prices have already gone up because from a farmgate of P15 per kilogram (/kg), and feed millers end up having to pay for P23/kg for their feeds.
“While we continue to hope for corn prices to be stable, we cannot stop the inevitable with all the calamities that come and go in our country,” PAFMI said.
Right now, there is an ongoing study at the Department of Agriculture (DA) to implement “possible reform of the tariff structure for yellow corn and to identify the necessary measures to ensure protection of our corn tillers if the tariff reform is implemented”.
The study was being implemented by a technical working group (TWG) created under Special Order No. 540, which was signed by Agriculture Secretary William Dar in July.
When asked for an update regarding this study, Agriculture Undersecretary Ariel T. Cayanan said the technical working group (TWG) studying this matter plans to come up with its recommendation within this month.
Dar also said on Monday that the damage that Maring has done in the country’s corn output will be considered in coming up with the recommendation.
PAFMI said that when it comes to lowering corn import tariff, “the operative word is balance”.
“We in the local feeds industry are always supportive of our local farmers and we are aware of the many constraints that they face year in and year out because of lack of government support. We lament the lack of infrastructure and equipment for our farmers because no matter how much they try, they can only do so much,” PAFMI said.
“However, we see importation as a band aid solution and at the moment, the best route to take albeit temporary. The lowering of tariffs can be another support for us, even as many of us struggle to keep our prices down despite the high prices of our inputs. We can use a portion of the tariffs of our imported meats to help augment infrastructure and equipment for our corn farmers,” it added.
In a study commissioned by the National Economic Development Authority (NEDA) to benchmark the performance of the domestic livestock, poultry, and dairy producers against those of China, Thailand, and Vietnam, high tariff on corn imports in the Philippines was seen as a driving force in the high cost of producing local livestock and poultry.
Dr. Roehlano M. Briones, research fellow at the Philippine Institute for Development Studies (PIDS), presented the study. According to him, the Philippines, during the last decade, had always paid for the upper bound of corn prices at $0.42 to $0.44 per kilogram, whereas China’s purchase price was only at $0.28 to $0.38 per kg, Vietnam at $0.22 to $0.29 per kg, and Thailand at $0.19 to $0.24 per kg.
The study, conducted in cooperation with the Southeast Asian Regional Center, showed that the cost of producing swine in the Philippines at P112.40/kg of carcass weight was the highest among the countries covered, with that in Thailand at P99.16/kg. The study also pointed out that the feed cost per kilogram in the Philippines was P64, while that in Thailand’s was at P54.54.
For commercial scale broiler farms, the cost per unit of broiler was highest in the Philippines at P92.40, and the lowest in Vietnam at P56.04. The share of feeds in the total production cost in the Philippines was 65 percent, while that in Vietnam was only at 41 percent.
Topping the recommendations made by Briones in the study was the need to undertake a comprehensive review of trade policies affecting the value chain to support greater competitiveness of the livestock, poultry, and dairy industries.
The study also pointed out that the government must earmark collections from tariffs on pork and chicken imports for funding of regulatory services and production support, as well as for investment in research and data collection as inputs to policy and program development.
It was reported earlier that amid the lack of government support, the Philippines has been slacking in terms of corn production over the last few years until now, and the situation has gone so bad that importation has already become a necessity.
This was according to Roger Navarro, president of the country’s largest group of corn producers Philippine Maize Federation (PhilMaize), who said the Philippines’ corn production has been insufficient for a while now and could not meet the demand for feed manufacturing.