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While most of basic commodities have recorded spiraling price hikes due to the ongoing oil crisis, the Foundation for Economic Freedom (FEF) is calling on the Marcos Jr. administration to reform corn import tariffs to a uniform five percent to bring down the cost of feeds and thereby lower the prices of chicken and pork in the country.
In an appeal to the government, FEF president Calixto Chikiamco cited that “the reform we are asking for is to liberalize corn imports, reduce the out-quota tariff to 5 percent and establish a uniform value for in-quota and out-quota raw corn imports.”
Presently, a five percent tariff on corn imports is being imposed within the minimum access volume (MAV) or in-quota of imported corn while imports outside the MAV, or out-quota, are levied with a 15 percent tariff.
“The input tariff for corn is five percent and the output tariff is 15 percent. The five percent input tariff is related to the MAV of 216,939 metric tons, but the demand for corn is much higher, around 5 billion metric tons,” Chikiamko pointed out.
He explained that the government must address concerns under the current tariff setup which results with almost all imports of corn being levied at the 15 percent tariff level.
He asserted that the proposed reform of corn tariffs would reduce the cost of feeds and consequently help lower chicken and pork prices.
“Feeds currently make up about 50 to 70 percent of production costs for both pork and chicken and corn is an ingredient in feeds, being primarily an energy source in compound feeds. So, lowering corn tariffs could result in a 2 percent decline in pork prices and a 1.7 percent reduction in chicken prices,” he spelled out.
Moreover, Chikiamco argued that the proposed reform would make protein sources such as chicken and pork more affordable to families, which could reduce malnutrition and stunting, and enable corn farmers to participate in higher-value-added activities in the corn industry and the agri-business supply chain.
In ending, he called for bold action on the issue, saying that “now is the right time to act on this to mitigate the impact of the recent rising prices driven by the Iran-Israeli-US conflict” which has already resulted in higher transport costs.