A twenty-billion-peso industry programmed to collapse in threemonths

A TIMELY SUNDAY SERMON: Lyman Beecher (1775-1863), an American preacher, delivered the following prayer -- "Oh Lord, grant that we may not despise our rulers; and grant, oh Lord, that they may not act so we can't help it."

No further comment.

If it's true that the United States government is requesting our government (in a note verbale dispatched to our Department of Foreign Affairs, dated March 15) to waive jurisdiction by a Philippine court over three American servicemen who're being charged with mauling a Cebu taxi driver, Marcelo Batestil, our answer should be a firm "NO."

The three US servicemen -- Petty Officers Shannon Towers, Johnny Lowerey Jr., and Michael Keyes -- were on shore leave when they assaulted the Filipino cabbie. So clearly their case is covered by the Visiting Forces Agreement. It was the Americans who asked us to ratify the VFA -- in the face of some misgiving on our part. Now they must adhere to it. There's no question about the American military whisking their "boys" away from the reach of our courts, even if a crime is not classified as "heinous." What do they think of us? A bunch of barbarians, unfit to mete out justice to their servicemen? A Japanese court tried US servicemen accused of raping a schoolgirl in Okinawa. And the VFA we mutually agreed upon was modelled on the US-Japan agreement. We must insist on no less.

What are they afraid of, really? That we'll throw those rowdy fellows into the brig and toss away the key? If the situations were reversed, and off-duty Filipino servicemen committed a similar infraction in San Diego, California, would the American judicial system allow them to get away? Enough talk already.

The President should stop putting up his dukes and growling about some "conspiracy" to bring him down every time there's criticism levelled at members of his family. It's part of the democratic process called "transparency" and even-handedness. Anybody who handles public funds or government-issued vehicles and commodities must be ready, at all times, to account for them.

Erap did the right thing in directing the Commission on Audit (COA) and the respected accounting firm of SyCip, Gorres & Velayo to conduct separate audits of the funds released by the Philippine Charity Sweepstakes Office (PCSO). So, let's wait for the results.

In the case of the First Lady, Dr. Loi Ejercito Estrada, most of us can't believe that she would misuse funds or misdirect PCSO financing. Loi is straight as an arrow. (Which cannot be said of everybody in the Chief Executive's family . . . uh, families). What can happen -- and, I'm afraid, sometimes does -- is that fastbreak operators and name-droppers claiming to be in the "support group" (that's the label they brandish for themselves) surrounding Loi "take over" things using her name.

Remember the case of the "hot sardines" and the "used clothing" which supposedly went into the charities of the First Lady -- but were found to have gone astray? When that scandal broke, the President rang me up to say that he had been assured the "proper receipts" and "documents" proving that those commodities had gone to Loi's charities were available and promised to send copies of them to me.

I asked him to hand the receipts to our Malacañang reporter, Marichu Villanueva. An hour later, the President told Marichu, giving vent to his anger and consternation: "I found there weren't any receipts -- and the items had been picked up by a certain fellow named Robert Uy!" He ordered the arrest of Robert Uy. "I don't know anybody called Robert Uy!" Erap reiterated to this writer a few days later. "This guy must be punished."

Was Robert Uy arrested? Perhaps the Palace will furnish us with an answer.

As for Mayor Jinggoy Estrada, I guess he'll have his own explanation for those PCSO ambulances. When they were distributed to the local mayors (he's chairman of the League), were the mayors the ones who painted his name on them? Prince Otto von Bismarck of Germany (1815-1898) said that "politics is not an exact science." In the Philippines, politics is precisely supposed to be "inexact."

Our knowledgeable Supreme Court sources say it's not true that the delay in the announcement of the September 1999 Bar exam results was due to the efforts of a certain Supreme Court Justice to lower the passing percentage in order to accommodate a nephew who happened to be an examinee.

The exam booklets of the more than 3,000 examinees have not been decoded yet, which means that to date no one -- not even the examiners who corrected the booklets -- knows who passed and who flunked.

The unfortunate rumor had gone around that the Bar exams chairman for last year's tests, Justice Fidel Purisima, was relieved by his colleagues and replaced with Senior Associate Justice Josue Belosillo for allegedly not disclosing that his nephew was an examinee. By tradition, members of the High Court commissioned to chair the annual Bar examinations committees are expected to decline the responsibility if a close kin is taking the tests. (Even examiners in the eight subjects are expected to do the same thing).

The Supreme Court is poised to deal with this matter without further ado, so as not to prolong the "agony" of suspense of the more than 3,000 hopefuls who had hoped to know the results as early as last Thursday.

Chief Justice Hilario Davide Jr. surely won't tolerate any hanky-panky -- or further delay.

I met with Senator Ramon Magsaysay Jr. yesterday, and in the course of our talks he pledged to work for the swift creation of "safety nets" to enable our local agriculture and food industries to cope with the flood of competing products coming in at very low tariffs owing to our accession to the minimum access volume (MAV) provisions of the World Trade Organization (WTO).

Jun Magsaysay, having been a businessman himself, was alarmed at the information that, unless the government bestirs itself to protect our local poultry industry, this P20 billion -- yes, twenty billion peso -- per annum industry may collapse within the next three months.

The other day, some representatives of the "broiler poultry industry"-- comprising small and medium enterprises managed mainly by families, partnerships, cooperatives and small corporations -- came to see me to protest the rampant "smuggling" of imported chicken cuts via Subic, Clark and other ports in the country.

They said they had already met with Agriculture Secretary Edgardo Angara and hoped they had impressed him with the urgency of their plight. The awful truth is that our chicken and poultry growers -- who streamlined their operations and modernized their techniques at tremendous cost (and produced 70 million "birds" or 112,000 metric tons in 1999 -- meaning at least 20 percent of our total industry production of some 380 million birds or 608,000 metric tons) -- face extinction.

The other 80 percent, of course, is produced by the big integrators, e.g. San Miguel Foods, Universal Robina, Pure Foods, etc.

Value-wise, the small producers pull in a gross revenue for the year of P5 billion. They directly employ about 20,000 workers. At five per family, these workers and their dependents total 100,000.

This does not include the millions of corn farmers, and providers of soya and feed wheat, and the service personnel who depend on the poultry industry.

It's bad enough, the poultry-raisers say, that the WTO mandatory importations under the so-called minimum access volume (MAV) already have the advantage of a low 45 percent tariff and are subsidized by their own countries, while importations outside the MAV entail only 50 percent tariff. What spells death to the SME poultry raisers is the smuggling into the country at "giveaway prices" of chicken leg quarters and chicken cuts -- which literally comprise "dumping" on the part of foreign poultry-sellers. (Eighty-five percent of these legs quarters and cuts come from the US).

The modus operandi is for these imported cuts and "legs" to be sold (often without limit) by alleged duty-free outlets in Subic and Clark.

In September 1999, the Department of Agriculture issued an order banning the importation of chicken legs and by-products since imports had alarmingly risen 33 percent over the MAV and "outside the MAV," both of which have to pay tariff. Obviously, this ban didn't prove effective. The government's Bureau of Animal Industry (BAI) has issued "figures" saying that 1.66 million kilograms of chicken leg quarters and 91,000 kilograms of other chicken cuts were imported in January 2000 alone, whereas the importations for the same period the year before had been only 384,000 kilograms.

Even this published amount, on the other hand, seems wildly inaccurate, the poultry raisers say. They showed me an official report issued by Editor Margaret Ernst of the "National Chicken Council Washington" (dated February 24, 2000) which recorded "top broiler parts markets in 1999 compared with 1998 . . . as follows . . ." Under the category of exports which went to the Philippines, 31,899 metric tons of "broiler parts" had come to us in 1999, in contrast to only 2,753 metric tons in the year 1998. These had a value of $18.105 million, meaning an increase of 765 percent!

How did this Washington Report jibe with the Bureau of Animal Industry's statistics that only 22,000 metric tons had been licensed to enter the Philippines? Since the Americans themselves admitted they had sent 31,899 M.T. to us, how did the extra 10,000 metric tons enter? Only the smugglers and greedy food entrepreneurs can tell.

Why can the Americans afford to dump their leg quarters and chicken cuts on us? Since American consumers prefer white chicken meat (and breasts), the red chicken meat left over is earmarked for exportation. For example, chicken leg quarters sell for 20 cents per pound, or approximately P20 per kilo. Since our local poultry raisers have to cope with a cost of production of P40 per kilo -- they're dead. They are being forced to sell their chickens at P29 per kilo, to hold their own with the cut-throat foreign competition -- certainly a "no win" situation. The problem is that after our local poultry-raising industry has been killed, then foreign suppliers will be able to dictate the prices in the future. All our poultrymen want our government to decree is that only WHOLE chickens, not parts, can be imported. Then, they assert, they'll have a fighting chance to compete.

We customers and consumers may thoroughly be enjoying the supply of "cheap" foreign chicken so readily available. But in the long run, we'll be the victims.

The local guys -- like the United Broiler Raisers Association (UBRA) -- know that it's useless to wave the flag. As the Romans used to say, however, caveat emptor. Someday, we'll be at the mercy of the big foreign players.

We may, in fact, already be dominated by the Big Players on the local scene. The big ticket food manufacturers aren't as bothered as the small and medium poultry raisers by the chicken parts bonanza being enjoyed by the Americans and other Western suppliers. They're utilizing the cheap stuff themselves right now, I'm told, and keeping their quotas unused until the peak season when they need them. Some aren't even buying their eggs locally anymore (for mayonnaise and other food products). Why? Because they can import powdered eggs "cheap" from the usual bigtime foreign sources.

Making matters worse, local corn and other major feed ingredients like soya and feed wheat are very expensive. My guess is that our corn producers -- unlike our modern-minded poultry raisers -- are still wedded to obsolete and backward methods. And what about the "high cost" of interisland shipping? Isn't it less expensive to ship from San Francisco to Manila, than out of the Visayas and Mindanao?

There are no quick and easy solutions. But our government must look for them and implement them. Otherwise, we'll be back to being "hewers of woods and drawers of water."

Incidentally, we're so in love with "imported" stuff that -- did you know? -- we even accepted a large shipload of frozen chicken which had been destined for Russia. When the shipment got to Russia two years ago, the ruble had crashed and the Russians didn't have the foreign exchange or valuta to pay for the chickens and chicken parts. Do you know what happened? The clever businessmen behind the deal simply transshipped the "rejected Russian chicken" (frozen a year and a half earlier, therefore not fresh at all) to Manila. And the chickens were snapped up by Filipino buyers!

Looking at the US "chicken council" report, I notice that Thailand and Malaysia were not mentioned at all. Does this mean that the Thais and Malaysians protect their own local poultry industries more faithfully than we do? By the way, we can't even export our local broiler products. The countries who export to us (like the US, Canada, and points West) have so many stringent foreign acceptance requirements or red tape that there's no traffic going in the opposite direction.

We love to prance and brag. Which is why we don't have time to notice that we're headed for the poorhouse.