By Manny Piñol
Those who are proposing that we lift tariffs on imported food items to bring down the price of goods in the market must read this.
Last week, following pressures exerted by economists on the farming sector blaming it for the increase in the cost of food items such as chicken, pork, fish, vegetables and rice in the market, the Department of Agriculture instituted administrative remedies.
These included:
1. Lifting the Special Safeguard Mechanism which sets a trigger price of P93.96 per kilo for poultry. This means that imported chicken brought in at P70 per kilo will be charged with an additional tariff of P23.96 to place the price at par with P93.96.
By lifting the SSG, it was believed that the entry of cheaper chicken from other countries would bring down the price of the commodity in the market.
2. Allowing the importation of food security fish species like Galunggong to fill the supply deficiency especially during the implementation of the Closed Fishing Season which variably starts from October to end of February in the different fishing grounds all over the country.
In the amended Fisheries Administrative Order which I signed last week, imported fish could now be sold in the public markets to ensure sustainable supply at lower prices.
3. Additional importation of pork under the Minimum Access Volume (MAV) to ensure that there will be enough supply during the Christmas Season.
Shortly after the lifting of the SSG for poultry, the farm gate prices of broiler chicken which was at P95 per kilo a week before, steadily went down.
Poultry raisers rang alarm bells as the farm gate price plummeted to P77 per kilo today, threatening the profitability of the industry.
This morning, however, Trade and Industry Secretary Ramon Lopez sent me a message confirming that while farm gate prices have dropped, there was no change in the retail prices of dressed chicken in the market.
This development confirmed what the stakeholders of agriculture and fisheries have been saying all along – the increase in the prices of food commodities happens in the market and does not benefit the farmers and fishermen.
In fact, the Philippine Statistics Authority last week reported that the increase in the farm gate prices of food items was barely 1% even with the TRAIN law.
The increase in the prices of food in the market, however, was placed at over 5%.
This is the best argument against the proposal of some of economic managers that lifting the tariffs on imported food items would result in lower prices of food commodities.
The problem is not caused by farmers and fishermen making more money from higher food prices but by traders, middlemen and speculators who are riding on the TRAIN law issue to justify their market and price manipulation.
What needs to be done now is for government to exercise its full powers in checking profiteering and price manipulation in the market.
Eliminating the tariffs is not the answer. In fact, it would result in a bigger problem in the agriculture and fisheries sector, the poorest sectors of Philippine society.
It is a kneejerk reaction to a problem which needs institutional reforms like cutting down on the tiers of middlemen and traders who control the food supply chain in the country.
(Photo downloaded from a public website shows chicken being sold in the public market of Metro Manila.)
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