Who’s afraid of imported pork?
Will we kill our swine industry if we ease up on pork imports now? This specter is being used to argue against such easing at this time when African swine fever (ASF) has massively reduced domestic pork production, pushing prices to twice the normal levels. The story being peddled by those portraying Agriculture Secretary William Dar and President Duterte as “heartless” is that hiked pork imports under Executive Order No. 128 will flood our markets and depress prices to drive pig raisers out of business. Never mind that 100 million pork-eating Filipinos, especially some 20 million counted to have gone hungry this past year, will find this key protein source for Filipinos even further beyond reach. That sounds more “heartless” to me.
If we set aside undue emotion and reckless generalization and examine the data, we would see that those doomsayers for the local swine industry are probably creating imaginary ghosts. An analysis of the data by former UP School of Economics dean Dr. Ramon Clarete — who also tends to be unfairly branded as a heartless “import lover” — should assuage the fears of local hog raisers and their genuine sympathizers. I must distinguish “genuine” because there are alleged loud voices with less-than-noble motives hiding behind “bleeding heart” arguments for the raisers. The conclusion would be further bolstered if one looks at the recent experience and outlook for China’s swine industry, where the toll of the ASF pandemic since 2018 was heaviest.
Clarete disputes the notion that easing up on pork imports will flood the domestic meat market to the destruction of the local industry, offering two key arguments. One, ASF is an ongoing international problem, which has restricted importable supplies. Two, our ability to handle large amounts of imported pork is limited by our inadequate cold chain capacity. Let’s look at the data.
As of February 2012, ASF was reported to be present in 11 European Union states, with Germany being the most recent to report an ASF outbreak. This is reported to have jeopardized their usual pork exports to China, valued at $873 million in 2019. Meanwhile, even as China is recovering and repopulating its swine herd, the US Department of Agriculture projects Chinese pork production in 2021 to remain 25 percent below pre-ASF levels, and expects it to exceed those levels only by 2025. This means that China will continue to take up a large portion of world pork exports, while Europe is now adding to that import demand as well, not to mention other ASF-hit countries in Asia and elsewhere.
Meanwhile, output in the United States and other major producing countries has reportedly softened due to COVID-19. In short, a deluge of imports is unlikely given the world supply situation—and note that we can only import from countries with no ASF. Our import prices are thus likely to be higher than usual, making the temporary tariff reduction under EO 128 essential just to keep local pork prices stable.
But even if there were unlimited supplies of pork out there, we could only import as much as our cold chain facilities can handle. The national cold chain roadmap prepared for the Board of Investments placed total existing capacity at 400,000 tons, with about a third exclusively for onions, tuna, sardines, and bananas. Meats, other seafood, dairy, other fruits, and other vegetables compete for the remainder. All told, lack of cold chain capacity dampens the threat imported pork poses to local producers, as meat kept beyond two hours under normal temperatures becomes unsafe for consumption. Unless massive new investments are made in cold chain facilities (which the temporary nature of reduced tariffs makes unattractive), the anticipated needed volume of imports just to fill the projected 500,000-metric ton supply gap and stabilize prices may not even be met.
Hog raisers should actually worry if we don’t ease up on imports now. Much higher prices could push people to shift consumption habits toward other meats and protein sources; as it is, Filipinos already eat more pork on average than the world does. When the pork supply situation recovers, hog raisers could well end up having lost a lot of their buyers for good.
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