Feedmillers want NFA to import yellow corn at zero tariff

The Philippine Association of Feed Millers Inc. (PAFMI) is asking the Department of Agriculture (DA) to allow the National Food Authority (NFA) to import yellow corn at zero-percent tariff.

PAFMI spokesman Ricardo Pinca said hog and poultry producers want to bring in yellow corn at this time when domestic corn prices are spiraling upwards. Currently, local corn is selling at P7.40 to P7.50 per kilo.

Pinca said that while corn is available in the international market, local corn users are unable to procure from this source due to the prohibitive 35-percent duty under the minimum access volume (MAV).

MAV refers to the minimum volume of agricultural products that a country is obliged to allow into its market under the World Trade Organization (WTO). For corn, the import tariff is 35 percent under the MAV, and 65 percent for volumes exceeding the MAV.

Corn traders said that at zero percent tariff, the landed cost of imported yellow corn would be about P6.20 per kilo, but under a 35 percent tariff, it will cost about P8.37 per kilo. And while Mindanao corn may be slightly cheaper than the landed cost of imported corn at 35 percent tariff, this becomes unaffordable if local transport costs that are also prohibitive, are included.

"Because of this, the feed milling industry is left with no other recourse but to cut down on production. As the primary consumers of feeds, the hog and poultry sectors will bear the brunt of the higher feed cost," said Pinca.

Pinca added the available volume of local corn is not enough to cover the requirement of the industry.

"Local corn production is expected to further decline because of the El Niño weather disturbance. In fact, the hog and poultry sectors are already feeling the ill effects of this projected production decline," said Pinca.

On the other hand, feedmillers that include hog and poultry livestock raisers, have only used about 50 percent of the 190,000 metric tons of corn available under the MAV.

Pinca said the DA can authorize the NFA to import corn at zero-percent tariff in times of projected corn shortage as a result of the El Niño, and to provide relief to the hog and poultry raisers.

PAFMI cited Special Order 468 issued in 1998 by the DA to the NFA, allowing the agency to import 300,000 metric tons of corn.

Local corn producers however, are asking for more tariff protection, and have urged government to raise the tariff on imported corn substitutes from the present range of seven to 10 percent to 50 percent by 2003.

The local corn industry, still reeling from poor productivity and low prices, wants more tariff protection since it cannot survive competition from cheap imported corn and corn substitutes.