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No Free Lunch

A porky problem

/ 04:06 AM October 27, 2020

“Pigs don’t vote, but corn farmers do,” an agriculture official declared over three decades ago, as he defended high import barriers then that made corn, a vital feed grain, a much more expensive burden to the livestock and meat industry than could have been. He was half joking, but half serious as well.

The statement exemplified how the Department of Agriculture (DA) then, and through the years thereafter, had been prone to making policy decisions based more on politics than good economics. Since then, livestock and poultry raisers and their downstream industries have constantly clamored for stronger policy and program support from government.

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Through the years, they saw the preferential attention government gave to the cereal grains rice and corn in terms of policy, programs, and budgets. Import barriers were kept high for rice and corn, with the effect of significantly raising their domestic prices relative to those overseas.

This reduced the pressure to be effective in improving productivity and competitiveness in our food staples — which indeed stagnated and even declined over time, only recently rising again — all in spite of highly-funded program support. And because the resulting higher price of corn also made costs of livestock and poultry production higher, import barriers for meat also had to be kept high to permit domestic producers to recover their higher costs through their own higher prices shielded from outside competition.

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The vocal victims have been the meat processors who faced high raw material costs tracing to expensive corn, thus expensive meat, with their competitiveness impaired by this chain effect of higher costs. (They were later to obtain the concession of lower tariff rates on processing-grade meat, as opposed to table-grade meat, but which led to a new problem with technical smuggling—but that’s another story I will not go into.)

The more important but silent victims were the Filipino poor, whose nutrition status got a double whammy. Not only were their staple cereals more costly and virtually ate up their food budget with hardly any money left for the ulam to meet protein needs; meat, with its resulting higher cost, became even less affordable, too. With hindsight, it figures why stunting due to severe malnutrition affected 45 percent of our children under 5 years old in 1990, meaning nearly one in every two young Filipino children then were damaged for life. These same people are in our labor force today.

Fast forward to 2020, when we have a livestock and poultry industry beleaguered by African swine fever (ASF) and avian flu. ASF is said to be “rampaging through Laguna and Calabarzon,” according to a veterinarian in the know, and has already closed large swine producers in Central Luzon. In a recent meeting with Bureau of Animal Industry (BAI) director Ronnie Domingo, ASF Task Force leader Dr. Sam Castro reported that an estimated one-fourth of our swine population has been decimated by the epidemic. If you’ve bought pork lately, you’d know that its price has been zooming, now even topping P300 per kilo, from the usual P200 and below. Now you know why.

For us, ASF is a particularly big problem, especially because pork is the favorite meat of Filipinos, who on the average eat 16 kilos per year, vs. 12 kilos for chicken meat — and we actually eat more pork than the world eats on average (12 kilos/year). Next to fish, it is the biggest source of protein for Filipinos. BAI has lined up a good “TIGIL ASF” plan to combat the epidemic, which needs a substantial budget for its execution. But Domingo laments that their budget proposal has been slashed in half.

Meanwhile, of the P15.3 billion DA program budget for production support services, rice gets P12.8 billion, a whopping 84 percent of the total, while livestock gets P756 million, a measly 5 percent. Rice similarly hogs (pardon the pun) DA’s other program budgets. But guess what: Livestock and poultry together contribute far more to total agricultural gross value added (27 percent) than rice does (19 percent). Where is our sense of proportion here?

And we wonder why the average Filipino’s diet lacks so much protein.

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TAGS: African swine fever, Cielito F. Habito, department of agriculture, No Free Lunch
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