It's now or never on pork

This is another letter from Manuel Bondad, our avid crusader on rice trading and farming, who has lately taken additional interest in the current raging issue on alleged technical smuggling of premium pork parts that local hog growers are protesting against.

But before we dish out the contents of his letter, which are excellently supported by facts borne from patient research, this column’s interest has been piqued by the issue, focusing on the continuing problem of hog raisers to earn better margins.

Hog growers, both commercial and more so backyard raisers, have legitimate concern on the alleged technical smuggling not only based on Bondad’s figures below, but more importantly from no less than Customs Commissioner Ruffy Biazon’s admission in several media interviews.

There is an urgent need to determine how special hog parts that are levied 40-percent tax are able to enter the country as offal, and therefore just get a special four-percent duty. Ferreting out the faulty process should be fairly simple; it is going after who are behind the mis-declarations that can be tricky.

Biazon’s newly organized task force has come up with a fairly simple process to avoid having those special pork parts pass off as offal, but it is causing complaints from importers who say that the process is slowing down receipt of their ordered products.

Offhand, it seems the system of tighter monitoring of import deliveries is working. The bigger challenge, though, will be keeping up the tight guard. Biazon is talking about removing manual record-keeping on such imports to lessen “human error.”

With greater transparency between ports of importing and exporting countries, guilty importers as well as customs officials can be dissuaded from mis-declaring products coming into the country.

Consumers are also affected

The other problem of hog growers is their profitability. Backyard growers, more specifically, are being squeezed not by the smuggling but more by the continuing rising cost of fuel.

Whether the slaughtered hogs are delivered directly by hog raisers or middlemen, the hike in fuel prices has affected the selling price of hogs in wet markets. This is the same reason why chicken and even fish prices are also rising.

This is not the job of our customs people, but more of the agriculture and trade departments. The issue does not only affect the profitability of hog and chicken raisers, but even the pockets of ordinary Filipinos whose daily wages have not risen to cover for such rising costs.

This is a case that demands the urgent and immediate attention of P-Noy.

Technical smuggling

And now, to Bondad’s letter.

“We commiserate with hog growers on the issue of technical smuggling, but perhaps never on ‘pork-less’ days.

“United States (US) statistics on pork exports to our country appear to validate decade-old accusations that importation of pork choice cuts – subject to a 40-percent duty – are being declared as offal (feet, tongues, rinds, heads, hearts), with a preferential five-percent tariff.

“Philippine offal and choice cuts are sourced from 20 exporting nations, with US’s share of about 30 percent on choice cuts and 18 percent on offal, derived from National Statistics Office (NSO).

“Pork data from NSO and the US Department of Agriculture (USDA) are available, and therefore utilized as reference points. The NSO reported Phl combined importation (from all sources) of choice cuts and offal in million kilos to be as follows: 83 million (2009), 147 million (2010), 136 million (2011).

“Phl imports from the US for the two items based on NSO are 31.2 million in 2011 from 44.5 million in 2010, comparable to USDA statistics at 31.7 million (2011) and 45.2 million (2010).

“But the similarity ends when choice cuts and offal are segregated. For 2010, US pork choice cuts exports to Phl were at 39.6 million (USDA), but only 24.7 million were on record imported by Phl from the US (NSO), the latter short by 14.9 million (38 percent).

“On the other hand, offal trade data at 5.6 million from USDA’s viewpoint is smaller, against NSO’s 19.8 million, the former in excess by 14.2 million (2.5 times).

Significant revenue losses

“Was there a ‘misrepresentation’ somewhere to possibly include some other pork categories, persistently voiced out by raisers no end? On pork ‘muscles’ allegedly being declared as swine ‘front feet,’ lost government revenues is significant, and may continue.

“Choice cut average unit values per kilo – declared at $2.06 (USDA) and $0.80 (NSO), and for offal at $1.42 (USDA) and $0.55 (NSO) – may result in foregone revenues to build classrooms in the countryside where family ‘backyard’ hog breeding or fattening is a pastime.

“Remember our grandparents? Children were sent to elementary public schools with proceeds from sale of a pair of swine of age.

“A perusal of previous years’ statistics shows pork imports have dropped in general in 2011 but not for liver and pig fat. But it isn’t enough as the gap between import valuation and reporting remains.

“NSO foreign trade statistics are based on ‘copies of import documents submitted to the Bureau of Customs (BOC) by importers or authorized representatives as required by law.’

“Another speedy source is the online submission of an electronic copy of a document. Government should heed backyard growers’ clamor to arrest ‘smuggling’. It’s now or never!”

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