Discussions on the Pork Minimum Access Volume (MAV) increase or MAV plus implementation guidelines progressed, with the MAV Advisory Board recommending that the 200,000 metric tonnes also be imported and sold over 12 months. .
MAV-AC members told BusinessMirror that the advisory body has approved at least three recommendations for consideration by the MAV Management Committee (MAV-MC), which will have the final say on implementing rules and regulations. MAV + pork. BusinessMirror has learned that the MAV-AC, voting 7-2, recommended dividing the import and distribution of the 200,000 metric tonnes of MAV + pork – as ordered by President Duterte (EO) decree 133 – out of 12 month, or about 16,666 MT per month.
In addition, the MAV-AC approved the proposal to allocate the MAV + of 200,000 tonnes of pork accordingly: 25 percent to regular MAV licensees, 25 percent to local pork producers and 50 percent to others. eligible importers interested. Likewise, the advisory body recommended that the import per company be limited to 500 MT per month, subject to its actual use and the distribution of the volume applied.
8 months or 12 months
One of the heated discussions at Wednesday’s MAV-AC meeting was whether the MAV + volume should be split over eight or 12 months.
The meat importers proposed, and this was supported by the meat processors, that the volume be spread over 8 months, as the EO 133 stipulated that the increase in MAV was only for the year MAV 2021, which started last February and will end in January 2022.
However, local pork producers insisted that the MAV + be split over 12 months alongside the one-year tariff reduction.
The body voted on the issue, with 7 members in favor of the 12-month division instead of the 8-month allowance.
The 7 members who voted in favor of the 8-month allocation were: representatives of the cereal sector, the pig sector, the other MAV products sector, the non-meat processing sector, the consumer sector, the sugar sector and national agricultural and fisheries councils. The two members who supported the 12 month allocation were the meat traders and representatives of the meat processing sector.
The president of the Association of Meat Importers and Traders, Jesus C. Cham, who represents meat traders in the MAV-AC, said the OE was clear that the increase in the MAV is only effective. for the year MAV.
Cham told BusinessMirror that allocating the MAV + over 12 months would mean “less supply and more chance of getting higher prices,” especially as the country approaches the coming months.
Cham stressed the urgent need to bring in imports as the country is constantly reeling from the impact of African swine fever (ASF) which continues to spread nationwide, exacerbating the country’s pig deficit. .
“I hope the management committee will choose the right mechanism and overrule the recommendation. In addition, it is clear in the OE that it says the year MAV, so why insist on 12 months? ” he said.
However, Nicanor Briones, president of the Federation of Pork Producers of the Philippines Inc., argued that MAV + ‘s 12-month pork division would help mitigate the expected impact of increased imports on local production. .
Briones explained that OE 135, which changed the tariffs, was the last decree issued by Duterte; therefore, its effectiveness of one calendar year should be tracked instead of the EO 133 timeline.
However, sources told BusinessMirror that Department of Agriculture (DA) officials present at the MAV-AC meeting told members that the OE on tariff reduction and MAV + are two separate issues, so with separate deadlines.
Briones revealed that Cham proposed the arrival of 55 percent of the MAV + within the next three months – which Briones said would be too damaging to the pork industry.
“In addition, they can still import through the out-of-quota which has a minimal tariff difference with the quota. Imported pork is cheap anyway, ”Briones told BusinessMirror.
“The 12 month allocation is the best we can do to protect pork producers and avoid oversupply. This will also somehow alleviate the [sense of] discouragement of producers to restock in the face of the influx of imports, ”he added.
Raul Q. Montemayor of the Federation of Free Farmers, which represents the grain sector at MAV-AC, supported Briones’ proposal to avoid oversupply in the country “since over-quota imports are unlimited anyway.”
Montemayor told BusinessMirror that they also agreed that MAV licenses for MAV + will only be issued upon presentation of bills of lading, meaning that imports are ready to ship from the country of origin.
The MAV-AC also agreed to recommend the allocation of MAV + by type of importer: 25 percent for pork producers, 25 percent for importers and 50 percent for other eligible parties.
The MAV-AC voted on the issue unanimously, which was a proposal from the DA. Finally, the MAV-AC will recommend that importers have a volume limit of 500 tonnes per month. However, Cham said the issue of the volume limit per importer has not been clarified and argued that the limit will be for the whole year and not per month. Cham said allowing companies to import again under MAV + could lead to the dominance of some companies, creating a cartel that could defeat the purpose of the measure.
“This question has not been clarified, but when you do the math, it seems unlikely. Theoretically, a company can import 500 x 8 = 4000 metric tons. 50 companies can take control / dominate, ”he said.
“My secondary objective is not to create cartels. In the event of a cartel, the price targets would be threatened, ”he added.
Cham said he had previously proposed that the MAV + allocation be based on a ‘first come, first served’ principle since there is already a limit of 500 MT per company, instead of dividing the total volume between pork producers, existing MAV licensees and others. parties.
For his part, Briones said pork producers who import under MAV + should not have limits on their import volume, in order to help them recover ASF losses.
Industry sources told BusinessMirror that the MAV-AC does not have any recommendations on whether or not to award MAV + based on regions of the country. Previous MAV + guidelines obtained by BusinessMirror showed that there was a proposal to allocate MAV + to Luzon, Visayas and Mindanao.
The recommendations of the MAV-AC will be subject to the approval of the MAV-MC, which Duterte had ordered to “ensure that the distribution of the import volume is fair and open to all qualified importers of pork” and in accordance with the existing rules and regulations concerning AVMs.
Duterte’s EO went into effect last week but is still pending implementation pending the release of final guidelines approved by the MAV-MC.