Corn farmers asked to defer low tariff corn implementation, incurs P10 billion revenue loss from low corn price of P8-10 per kilo

October 13, 2021

Corn farmers have asked the Department of Agriculture (DA) to defer implementation of lower tariff on corn imports as this will be a “death sentence” to farmers given the prevailing low price of corn, bringing revenue loss of P10 billion.
House Resolution 2289 has been filed by Cagayan de Oro Representative Rufus Rodriguez with the pleadings of the Philippine Maize Federation Inc. (Philmaize) and the United Broilers and Raisers Association (UBRA).
The resolution was directed too as a petition to the National Economic Development Authority and the Tariff Commission.
“The abundance of production did not increase the income of farmers which shows the ‘incompetence of the DA in promoting and managing our own agricultural resources’,” according to the House Resolution.
Corn tariff is now low at 5% if importation is within the Asean Trade in Goods Agreement (ATIGA). It is slapped with a 35% duty within Minimum Access Volume (MAV) importation and 50% outside MAV.
DA just created a Technical Working Group to study lowering of corn import duties in order to bring down animal feeds and livestock and poultry prices.
Philmaize has debunked the assumption that feed prices will go down given lower corn price (consequently pulling down livestock and poultry price).
“Philmaize stated that these corn prices do not have direct and immediate correlation to the decrease of feeds and meat price. In the last two years, corn price plunged to P8-9 per kilo, but there was no reduction in the price of feed and meat.”
Rather, it is the huge importation of feed wheat and corn that caused the fall in local con price to its lowest level. This is based on a study of the Philippine Competition Commission, Philmaize cited.
Philmaize attributes the fall of local corn price to the “uncontrolled, unabated and uncalibrated large arrivals of feed wheat and imported corn during the wet season harvest. This displaced local corn harvest from getting into warehouses and silos of livestock and feed mill sector.”
Corn price plunged by a hefty 33% to P8-9 per kilo, far below the P13.25 per kilo support price established by the National Food Authority (NFA).
The economic loss at P10 billion in revenue experienced by farmers was exarcerbated by the Covid 19 pandemic.
Rodriguez said UBRA President Jose Elias Inciong also stressed that the price of poultry and livestock are “not dependent on the rate of corn tariffs but on the highly in-demand dynamics of the commodities.”
Moreover, even the Bayanihan sa Agrikultura admitted a low import duty on corn does not guarantee significant reduction in the price of livestock and poultry.
The resolution cited the Magna Carta for Small Farmers in invoking the low corn tariff, saying it is the state’s role to assure “equitable distribution of benefits and opportunities realized through empowerment of small farmers.”
“The state should recognize the need to keep our local farmers motivated, encourage them to continue planting, and keep their production stable by implementing a more strategic approach to balance enterprise resource planning,” according to the resolution. (Melody Mendoza Aguiba)

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