Jobs, Income Losses! The Socio-Economic Injuries Of Massive Pork Importation

Flooding the market with imported commodities to stabilize consumer prices and address inflation actually inflict serious socio-economic injuries on Filipino food producers, especially poor farming families.

While imported food items such as rice, pork and chicken may indeed cost lower, the massive and unimpeded importation of items which could be produced locally, deprives local producers of benefits from activities involved in the whole production chain.

Let us take a closer look at the case of the hog industry to prove this point.

The Philippines produces about 13-million heads of hogs every year making the country No. 8 among the top producers in the world.

This is an industry which has thrived and survived even in the worst crisis with very little government assistance or intervention.

The production chain starts with the piglets production which either come from commercial breeder farms or community breeding facilities serviced by “traveling boars” and lately, artificial insemination.

Seventy percent of the piglets are fattened in the backyards of many poor and medium sized families who consider backyard hog raising as their virtual “piggy banks” from which they could draw little amounts to pay for their children’s tuition fees at the opening of classes or the medical bills in cases of emergency.

To produce a 100-kilo hog, the commercial farmer needs 247 kilos of feeds, about P1,000 in biologics plus the cost of labor, water and power which could total about P10,000.

Assuming that the buying price is P100 per kilo live, the backyard hog raiser is break even and his earnings would be the quantification of his labor. At P120 per kilo, he earns P2,000 per head plus the value of his work.

From the farm, the hogs produced by commercial and backyard farms are brought to the slaughterhouse, then to the market stalls or meat shops and the dining tables.

Along the production chain, there are key players who benefit from the different activities and these include:

1. The Feed Millers, Veterinary Supply Companies who supply the biologics and the people involved in the manufacturing and distribution, including community outlets;

2. The Feeds Raw Materials Producers who supply Corn, Rice Bran, Copra Meal, Fish Meal and Cassava and companies who supply Soya Meal and micro-minerals;

3. The Swine Breeder Farms who supply the piglets, the “Traveling Boar” owner whose consumes gasoline to move his boar around, the backyard breeder who produces upgraded piglets sold to his neighbors for P2,500;

4. The Commercial Hog Farms who use up water and power and the Backyard Hog Raiser;

5. The Butchers in the slaughterhouses who are able to bring home to their families pig intestines for viand and the workers in the commercial slaughterhouses;

6. The Sidestreet Eateries and Carenderias who serve pig knuckles with Black Beans and Young Jackfruit and Sisig;

7. The Truck Drivers and laborers who haul the pigs from the farms to the slaughterhouses to the market.

These are the indispensable players in the long and profitable production chain of the local hog industry who will be deprived of earnings when the market is flooded with imported pork.

The losses, compared to the advertised reduction in market prices of pork are staggering.

At a production cost of P10,000 per 100-kilo hog and an estimated farmer’s profit of P2,000 per head, the importation of 400,000 metric tons of pork (which is roughly 8-million heads of hogs) is translated to a loss of income opportunities worth P96-B.

The P96-B in lost income opportunities is based on the assumption that the 400,000 metric tons or 8-million heads of hogs are sourced from local farmers.

That does not include earnings lost in ancillary activities related to the production of hogs and processing of pork and pork products which need to be quantified to accurately assess the losses because of importation.

On the other hand, if it is assumed that by importing pork, the price per kilo is brought down by about P50, the estimated savings by consumers would only total P20-B.

This is a classic case of flawed economic assumptions where the assumed earnings of local hog growers of P96-B are squandered to be able to bring benefits to consumers worth P20-B.

Economists who push for unimpeded importation claim that the benefit of the consumers is paramount adding that “It’s a No-Brainer, 105-million consumers against 5-million farmers.”

These indisputable numbers, however, effectively thrash their argument that flooding the market with imported commodities would tame inflation, help the Philippine economy and result in greater benefits for the greater number.

The misrepresentation of facts is so gross that one economist even threatened that if the massive pork importation is not allowed, there would be higher pork prices, inflation, poverty and malnutrition.

This is a complete distortion of the truth which even an ordinary netizen spotted when he asked in a comment: “So, are Muslim Filipinos malnourished and poor because they do not eat pork?”

The truth is by relying on importation instead of boosting local production, thousands of key players in the hog industry are effectively deprived of the opportunity to work and earn profit.

Given their sterling academic credentials from top schools of economics, one wonders whether the country’s economic thinkers inadvertently failed to consider these numbers in their assessment of the economy or they deliberately ignored these to pursue their Neo-Liberal Economic Agenda.

Whatever their motivations are, one thing is certain: They are misleading the decision makers and the public by presenting an incomplete picture of the economic and social implications of the massive and unimpeded importation of pork and similar products which could be very well produced by Filipinos.

Importation? Yes, it is the norm in a free market and a universal practice embraced by nations to address any deficiency in local production.

The volume of importation, however, should only be up to the extent of the shortfall in domestic production.

Anything beyond that undermines the growth of local industries and destroys the economic and social well-being of millions of Filipino families.

(Submitted by Sec. Emmanuel F. Piñol, PhD, Chairman, Mindanao Development Authority and Former Secretary, Department of Agriculture, to the Office of Senate President Vicente Sotto III as an input during the 3rd Senate Committee of the Whole Hearing on Food Security.)

(Photos were downloaded from public websites.)