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Feed millers seek removal of tariffs on animal feed inputs

Published on 5 June, 2008, Last updated at 05:44 GMT
 

Feed millers have asked the government to remove the import tariff on animal feed inputs.

In a joint letter to the Philippine Tariff Commission, the Philippine Association of Feed Millers Inc. (PAFMI), the National Federation of Egg Producers of the Philippines (NFEPP) and the National Federation of Hog Farmers Inc. (NFHFI) have sought the removal of duties on soybeans, soybean meal, dried distillers grain soluble (DDGS) and tapioca residue pellets.

Soybean is subject to a tariff of 1.0 percent, soybean meal 3.0 percent, DDGS 3.0 percent, and tapioca 35.0 percent.

The PAFMI had asked the Department of Agriculture in January to suspend tariffs on these products for one year. The petition remains pending.

A Philippine Daily Inquirer source in the industry said the government was not too keen on removing the tariff on feeds ingredients as this would translate to a revenue loss of about P500,000.

In the petition, the groups said “prices in the world market have risen substantially, such that it has become economically unviable to produce animal feeds without significantly raising prices in order to recover costs. Prices of soybeans and soybean meal have nearly doubled since 2006.”

Former PAFMI vice president Ric Pinca said the price of soybean meal had gone up to P25 a kilo from last year’s P16; coconut oil, P75 a kilo from last year’s P34; and DDGS, P18 a kilo from P9.

Pinca said 40 percent of feed inputs were imported.

Feeds account for 65-70 percent of animal raisers’ total costs. The cost of raising hogs has gone up to P75-P80 a kilo from P69-P65.

In the petition, the groups added that the raw materials being imported were not produced locally.

“Removing tariffs would not hurt local producers nor would this lead to economic dislocation of any sector,” they said. “Removing the tariffs would benefit not only feed millers and the livestock sector but local consumers as well in the form of reasonably priced meat and poultry products.”

“The proposed lifting of the tariffs would also protect the local feed-milling industry as it faces increasing competition from neighboring countries that produce these raw materials. China is a major source,” they added.

They also said other ASEAN countries had already removed their tariffs on the feed inputs following worldwide increases in prices.

“Some exporting countries have imposed export taxes to control the outflow of these commodities. The Philippines should not be left behind to bear the brunt of rising costs worldwide,” they added.

 

 
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