Addressing the fowl problem
Local poultry raisers were in an uproar last week over an alleged directive from the government for them to reduce production to “give way” to more imports.
The United Broilers Raisers Association and the Philippine Chamber of Agriculture and Food Inc. decried what it called the “bizarre thinking” behind the order, especially at a time when the sector is reeling from losses due to the COVID-19 pandemic.
The Department of Agriculture (DA) eventually labeled the issue as “fake news,” saying there was mere miscommunication between the Bureau of Animal Industry and the local growers.
Still, what was clear is that imports of chicken meat will continue despite the glut in local supply.
According to Agriculture Secretary William Dar, the government will allow the importation only of chicken products not available locally — deboned meat, for example, as this is needed by food processors.
There is no denying that imports hurt the local industry, which has suffered a series of misfortunes that include the bird flu scare and the slump in demand caused by the COVID-19 lockdown. Local poultry growers petitioned the government last May 4 for the immediate suspension of imports of poultry meat and poultry products to prevent the further decline in prices.
Governments of other countries are doing everything they can to protect their local industries from the adverse effects of the pandemic. As the Philippine government lines up billions of pesos in financial assistance to help embattled economic sectors like tourism and labor, its agencies, in turn, should identify specific segments in their jurisdictions that need immediate assistance. For the DA, the poultry sector is one that will gladly welcome such help.
The pressing concern is to address the apparent supply glut. As of May 25, data showed that the frozen inventory of chicken was at 97 million kilos—the highest inventory recorded by the industry. This has led to falling farm-gate prices of chicken to as low as P56 a kilo at the height of the quarantine, or below the production cost of P70 a kilo.
This short-term problem could be about imbalances in regional supply and demand. As the Bureau of Animal Industry has noted, there were surpluses in some regions and shortages in others. If the issue is about logistics, it can be addressed by identifying the surplus areas and tapping logistics companies for help in bringing the extra chicken supplies to areas where demand is unmet. This problem was made very clear in Luzon during the lockdown, when the entry and distribution of chicken and other meat products, particularly in Metro Manila, was constricted by numerous checkpoints set up to implement the quarantine, raising a howl from producers.
A more lasting measure to help the local poultry industry is to help it modernize and move up the production chain. It should be given the capability to process chicken instead of simply raising them. Dar has promised that if the imported products would be available locally, these would be prioritized even by the food processors.
The DA says it is already looking to revive within the year a government-owned, triple-A dressing plant in Tarlac built in 2014 but was never put to use. Plants with “AAA” accreditation have facilities and procedures that pass both local and international standards. The P100-million industrial complex has the capacity to process as many as 30,000 chickens a day.
For other private growers far from the Tarlac facility, progressing to the processing of poultry should be the next logical move if they are to survive. The government can extend cheap loans to allow them to finance this upgrade. Forming regional cooperatives can also help address the problem of having to deal with many growers in the modernization process.
There are ways for the local poultry industry to survive the pandemic and the economic downturn, but it will need the robust and sustained help of the government, especially in modernizing the sector. Only when the local industry has achieved the capacity to meet the processed requirements of the market can the problem of imports and falling prices be addressed adequately.
