Alcala won't okay bid for duty-free corn importation

MANILA, Philippines - Agriculture Secretary Proceso J. Alcala is not inclined to approve the request of pork producers and local feedmillers to import 100,000 tons of duty-free corn.

 Speaking at the Communications and News Exchange (CNEX) forum of the Philippine Information Agency (PIA) yesterday morning, Alcala pointed out that in the first place, the request for duty-free corn importation must be coursed through the Tariff Commission and not the Department of Agriculture.

The process of hearings and approval, Alcala pointed out, would take some time so that possible arrival of the corn importation could coincide with the harvest of corn that is already planted by corn farmers, thus, adversely affecting local corn prices.

 Moreover, Alcala said the intent of the corn importation is to drive down local corn prices which have gone up slightly due to the recent typhoons.

However, Alcala stressed, “there is no actual shortage of corn since most of the quality corn had already been harvested before the typhoons hit.”

If the pork producers and feedmillers want to import corn, Alcala suggested, they could do so using the minimum access volume (MAV) allocation which, however, is still subject to a concessional tariff.

Additionally, Alcala pointed out, there is a 400,000-ton shipment of feedwheat arriving next week.

Based on its own figures, PAFMI’s feedwheat importation for 2011 will reach 1.1 million metric tons.

Alcala, while agreeing to study the request, stressed that he would be more supportive of local farmers and investors who have already invested in drying and storage facilities for corn, allowing them to earn a return on their investment.

The Philippine Association of Feed Millers, Inc. (PAFMI) recently requested the DA permission to import 100,000 metric tons of yellow corn duty-free.

According to PAFMI, the typhoons and flooding that hit Southeast Asia hampered deliveries from Thailand and jacked up the prices of Philippine stocks.

Pork producers had been the first to write the DA, seeking permission for duty-free importation of corn to lower their production cost.

Yellow corn is the main ingredient in the production of livestock feeds. Yellow corn imports are subject to 35 percent tariff.

PAFMI president Norman Ramos said in a letter to Alcala that the 100,000 tons would make up only 13 percent of the requirements for the production of livestock feeds from January to March 2012.

The proposed importation of 100,000 tons, thus, the PAFMI head said, is not expected to drive down the prices of local corn.

 Feedwheat can replace yellow corn in hog feeds, but cannot be used to substitute corn in poultry feeds.

Alcala believes that allowing duty-free importation of corn would discourage corn farmers from planting in the next crop season.