Philippines Farmers Eye ASEAN Corn

PHILIPPINES - Members of the United Broiler Raisers Association (Ubra) are eyeing the possibility of importing corn under the Asean Free Trade Area (AFTA) scheme.

24 March 2009

3 minute read

Asia

UBRA president, Gregorio San Diego Jr., told Business Mirror of the Philippines that under the Afta scheme, corn traded among members of the Association of Southeast Asian Nations (ASEAN) are slapped a 30 per cent tariff or lower compared to the 35 per cent duty on corn imported under the minimum access volume (MAV) scheme.

MAV is the quantity of an agriculture product the country may import in a year at the in-quota tariff rate committed by the Philippines to the World Trade Organization.

"Importing under the AFTA scheme is attractive to us because we know that we do not have to ask the permission of the government to bring in corn. But nothing is final yet and everything is still under study," said Mr San Diego in a telephone interview.

Right now, the Ubra chief said there is no shortage of corn for the livestock and poultry sector.

Should poultry raisers decide to import corn from Asean countries to plug a shortfall, they will source it from Indonesia, Vietnam and Thailand.

"With 2010 just around the corner, tariffs for corn under Afta could still go down. This will make corn traded among Asean countries cheaper," he said.

AFTA is a trading agreement originally signed in 1992 by six members of the ASEAN: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand.

The free-trade arrangement seeks to increase ASEANS's competitive edge as production base in the world market through the elimination of tariffs and non-tariff barriers.

Meanwhile, Mr San Diego said that the country’s corn supply has improved considerably and that yellow corn is now sold at an average of 13 pesos (PHP) per kilo in trading stations.

"There's enough supply [of corn]. From what I know, around 280,000 metric tons of corn will arrive in the Philippines by May," he said.

In January, the livestock and poultry sector pushed for the duty-free importation of yellow corn after prices shot up to more than PHP20 per kilo. As a compromise and in consideration of corn farmers, the industry and the government agreed to import the produce at 35 per cent duty under MAV.

In its January report, the Bureau of Agricultural Statistics said corn production in the first half of the year will drop by 2.63 per cent to 3.21 million metric tons (MMT) against the 3.29 MMT in the same period last year, reports Business Mirror.