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Pork
Quarrel Sautes Consumers Hog raisers and meat dealers are at odds again. While there is no clear solution yet, what is definite is that consumers are the victims of this latest skirmish. Disgusted meat dealers staged a pig holiday last week, fed up with the increased farmgate price of live hogs at P92 per kilo, or P10 more than the agreed price of P82 per kilo that had been discussed when GMA had called them earlier to address rising pork prices. Of course, by declaring a pig holiday at a time when the regional avian flu had dampened consumer appetite for chicken, pork prices quickly moved up to the current level of P150 to P160 per kilo. The December-January average was only at P120 to P130 per kilo. Just like OPEC To defend themselves, hog raisers in turn blamed rising production costs, especially of corn, which makes up the bulk of the feed meal, for their decision to cut production and to be able to cope with the expensive feeds. The unfolding intramurals reminds me a lot of how Middle East oil producers manipulate prices by keeping their crude faucets partially opened (or closed). In the current drama involving hog raisers and meat dealers, there is no pork shortage though. In fact, there are hogs available in the market as long as meat dealers are willing to pay for higher prices. Challenging hog raisers production cost The alleged high production cost alibi of hog raisers is being challenged. A study done by the Philippine Maize Federation Inc. shows that for every P1 per kilo increase in corn prices, the direct effect on meat prices is only P1.90 per kilo on live hogs. Definitely, not by P10 per kilo. So citing the rise in feed costs, especially corn, as the sole culprit is not believable, according to industry people. Perhaps the hog raisers should look at other cost inefficiencies for which they, themselves, are responsible. Of course, reducing production cost may require some effort. While by merely tightening supply, an additional P10 per kilo is easily achieved. GMA acts on hog raisers howl The government of GMA reacted positively to the request of hog raisers to allow importation of 350,000 metric tons of corn at duty-free rates, and as a bonus, the agriculture department will also be requesting the Tariff Commission to suspend the tariffs on soybean meal and amino acids for six months. So as not to appear one sided, GMA also authorized the duty-free importation of 5,000 metric tons of pork which I'm sure was slightly discomforting to hog raisers. All of these look like a lot of lost revenues again for the government, especially during these times when it is scrambling to shore up its budget deficit. But since it is election time, the budget deficit takes a back seat. The government should now make sure that all these subsidies being given to hog raisers and importers find their way into the market place. The price of pork to the ultimate consumer must be reduced. Otherwise, while campaign support may be forthcoming from hog raisers and pork importers, the burdened consumers will not deliver the votes. Other measures needed The agriculture department is reportedly looking at other initiatives to improve the supply chain and bring down cost by facilitating a marketing tie-up between the hog-raisers and meat vendors in wet markets. Cutting out meat dealers will, however, raise other issues. In addition to encountering difficulty coping with high production costs, hog raisers will have to contend with the cost of transporting hogs to slaughterhouses and the wet markets. Hog raisers will also be expected to extend the usual credit line currently enjoyed by meat vendors. All of these measures should be all well and good if it will really bring down retail prices of pork. But as this whole new set-up will not be in place overnight, consumers must be warned to look at other food substitutes or be content with having less pork in their weekly menus. An easier solution seems to be for government to allow importation of more cheap pork from our friendly neighboring countries. This raises the basic question. Why can our neighboring countries produce and export pork at prices lower than what is prevailing in the domestic market? Instead of quarreling and sautéing consumers, this is what the hog raisers and others involved in pork supply business should focus on.
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