Import policy may hike processed meat prices

PHILIPPINE NEWS SERVICE — MEAT processors yesterday questioned the wisdom of a new policy that raises tariffs on imported raw materials used to make processed meat at a time when food prices are soaring.

In letters to agriculture officials, the Philippine Association of Meat Processors Inc. said the policy would result in further increases in food prices.

The association’s members make hotdogs, corned beef, meatloaf, ham, sausages and other processed meat. Their warning comes amid a sharp rise in the price of rice, and news that bread would soon follow.

World Trade Organization member countries such as the Philippines are allowed to import certain levels—called the minimum access volume—of agricultural products at a lower tariff. Imports above this level must be done at a higher tariff.

Starting April 1, the Agriculture Department froze clearances for low-tariff imports. It then allocated half of them to livestock producers and reserved 10 percent to stabilize prices. This means importers and processors must share only 40 percent of the minimum access volume.

The higher tariffs that meat processors must now pay will lead directly to price increases for their products, the association’s executive director, Francisco Buencamino, warned.

Meat processors had expressed their concerns in October 2007, but the Agriculture Department went ahead with its new policy anyway, Buencamino said.

He said the large allocation for livestock producers would encourage them to go into trading instead of improving the industry’s production.

Local livestock raisers have been at odds with meat processors over the entry of cheap Indian carabao meat, which they say competes with local production.

Both groups have been lobbying the Agriculture Department for favorable treatment.

The meat processor’s association is composed of 31 companies with an annual production of about 600 million kilos of meat products worth over P80 billion. The association groups the largest meat processors in the country and directly employs 35,000 Filipinos. It also provides indirect employment to 50,000 others.

Also yesterday, the head of the Philippine Baking Industry Group, Simplicio Umali, told a radio interview on dzBB that consumers could expect the prices of bread and other flour-based products to rise starting April 15.

Because of rising flour prices, consumers may expect an increase in the price of pan de sal by P1 or P1.50 apiece. Prices of loaf bread would go up by P3 to P5 a loaf, he added.

Even the prices of noodles and pasta would rise because these too use flour, Umali said.