MANILA, Philippines — The Department of Agriculture (DA) is looking at curbing the country’s agricultural imports by temporarily suspending the minimum access volume (MAV) for pork and corn this year.
But certain quarters, particularly importers, are opposing the plan, claiming that the suspension defies the wisdom of President Marcos’ Executive Order (EO) on extending lower tariff rates on food items.
Agriculture Undersecretary Roger Navarro confirmed to The STAR that there was an instruction from Agriculture Secretary Francisco Tiu Laurel Jr. to assess the possibility of stopping the issuance of MAV import certificates (MAVIC) this year.
The non-issuance of MAVIC would mean that importers would not be able to bring in commodities within the MAV, also known as in-quota, which allows them to pay at a lower tariff rate.
The country’s pork MAV stands at 54,210 metric tons, while corn MAV is at 216,940 MT.
“The intention is you need to help your local (farmers). How can you help the local (farmers) with the recent developments? Example, the lowered tariffs have been in place for the last three years but there was no reprieve for farmers. MAV was still there,” Navarro said.
Earlier this month, Navarro issued a memorandum addressed to the MAV Secretariat relaying the “directive” of Tiu Laurel to “suspend” the issuance of MAVIC for rice, corn and pork until the end of the year.
The MAV Advisory Council (MAC), composed of nine industry stakeholders, recently met and discussed DA’s plan and eventually issued a resolution endorsing a status quo on the MAV for the year.
The MAC argued that suspending the pork MAV would impact the domestic supply of the meat product. Changing the MAV rules unilaterally would also risk certain trade agreements, including bilateral ones, MAC added.
The council noted that the country is required to inform the US at least six months before any changes to its country’s MAV rules are adopted, under an existing bilateral agreement.
However, MAC’s resolution is only recommendatory since the MAV Management Committee, chaired by the agriculture chief and composed of other Cabinet secretaries, has the final say on MAV matters.
Navarro maintained that importers are free to bring in their goods within the out-quota volume, which he noted is technically unlimited.
He emphasized that removing the MAV would defeat smuggling as the government would just deal with one tariff rate.
“We are thoroughly evaluating it as part of the possible actions we need to do because where can you find an agency for the farmers that is not helping the farmers?” Navarro said.
“(This) might be shortlived but at least we provided the heart,” he added.
Raul Montemayor, a MAC member representing the rice sector, argued that the government could be leaving itself open to disputes from trade partners should it pursue suspending the MAV unilaterally.
“The intention of suspending the MAV is okay with me. But if a trade partner complains because there is no MAV then they should address it. That’s outside the scope of the MAC,” Montemayor told The STAR.
But Navarro said the Philippines is a “sovereign country” that “can decide on its own” policies that would benefit its domestic sector.
Meat Importers and Traders Association president emeritus Jesus Cham, who also sits at the MAC, said removing the MAV would defeat the purpose of Marcos’ EO 50 that extended lower tariff rates on pork and corn.
Under EO 50, there is a 10 percentage point tariff differential between pork and corn imports inside and outside the MAV.
On the other hand, Philippine Chamber of Agriculture and Food Inc. president Danilo Fausto is supporting the suspension of the MAV, arguing that the loss of the in-quota volume will not have a “negative impact” on importers since they are free to import outside the MAV.
“Whether you increase or lower the tariffs, the importers will continue to purchase because we lack supply. But ultimately, lowering of tariffs should be for the benefit of the consumers. So, the importers must prove that they have passed on the savings from lower tariffs to the consumers,” Fausto told The STAR.