The government must extend the reduction on tariff of imported corn in order to assure the security of the country’s supply of raw materials for animal feeds, according to the Philippine Association of Feed Millers, Inc. (PAFMI).
The government is still deliberating whether to extend the effectivity of Executive Order (EO) 171 signed by former President Rodrigo Duterte last May which lowered the tariff rates on yellow corn, pork, rice and coal until the end of the year.
PAFMI said EO 171 must take effect beyond 2022, in recognition of the continued volatility, uncertainty, complexity and ambiguity of the global foods, feeds and fuel supply chain that have caused global inflation.
Under EO 171, imported yellow corn tariffs were lowered to 5 percent for in quota and 15 percent for out quota which PAFMI claims has helped in lowering the production cost of poultry, pork, eggs and fish.
PAFMI cited that imported yellow corn augments the shortage in local production and accounts for about 50 to 70 percent of the total cost of feeds with the tariff reduction providing reprieve to counter rising food prices.
PAFMI also wants the government to increase the allowed minimum access volumes for imported corn to expand the benefit that accrues from lower tariffs as inflation is expected to remain elevated.
The group also pointed out that based on recent farm surveys conducted by its members, local corn yields will remain low due to the effects of high prices of imported fertilizers paired with the continuing tight global supply of corn.
Earlier, RodericoBioco, Phil Maize chairman emeritus, said that extending the reduced corn tariff or its permanent removal is “very dangerous” saying it may further discourage local growers to plant the crop despite the local supply shortage.
Based on data from the Philippine Statistics Authority, the country produced a total of 6.04 million metric tons (MT) of yellow corn last year, a0.5 percent increase from 2020’s 6.01 million MT.
Local feed millers currently need more than 9 million MT worth of yellow corn annually to operate sustainably. – Jed Macapagal
