An official source reports that the lowering of meat import tariffs last August as part of measures to combat inflation is now threatening to bankrupt domestic farmers and the agriculture ministry wants the tariffs to be raised again.

Minister of Agriculture and Rural Development, Cao Duc Phat, told delegates at a recent meeting in Ho Chi Minh City that he plans to recommend to the government to hike the tariffs.

Vietnam's World Trade Organization (WTO) commitments only require cutting the import tax on poultry meat to 15 per cent and on pork to 25 per cent by 2012. But they were slashed from 40 per cent earlier to 12 per cent and 20 per cent last August.

Since then, imports have been flooding in, lowering market prices.

In the January-August period 118,000 tons of all kinds of meat were imported, according at Nguyen Dang Vang, head of the ministry’s Animal Husbandry Bureau (AHB).

Chicken accounted for more than 103,400 tons, almost triple the 2007 figure, and pork for 8,600 tons, 20 times up.

Foreign frozen chicken cost just two-thirds the price of local products.

A 522-gram box of Vietnamese chicken legs sells for VND44,370, almost the same price as that of a 900-gram box from Brazil.

La Van Kinh, deputy head of the Southern Institute of Agricultural Science, said the imports were threatening the existence of the domestic animal husbandry sector.

Many breeders, who are already struggling with higher production costs and epidemics, have gone bankrupt since their products can’t compete with cheaper foreign imports, delegates said at the meeting.

Chilly weather killed up to 200,000 livestock in northern provinces earlier this year.

Bird flu infected more than 67,000 poultry and saw most of them slaughtered.

Blue-ear disease, also known as porcine reproductive and respiratory syndrome, prompted the culling of some 270,500 animals.

Poor Planning Blamed

The fact that the country has to import large amounts of animal feed and raw materials has pushed up their prices, some delegates said at the conference.

Animal feed prices have risen 40-60 per cent compared with late last year, according to the AHB.

Many delegates blamed the lack of zoning plans and strategies for growing plants needed to make feed for the high feed prices.

On the sidelines of the conference, Pham Duc Binh, deputy head of the Vietnam Feed Association, said the dependence on imports of corn and bran is paradoxical in an agricultural nation like Vietnam.

In the first half of the year, more than 3.5 million tons of animal feed was imported for US$1.52 billion in addition to large quantities of raw materials like corn and bran.

According to the AHB, domestic producers can meet nearly 79 per cent of the demand for animal feed and 70 per cent of demand for raw materials.

Call for an End to Tax on Feed Ingredients

Mr Phat said his ministry would also ask the government to remove all tariffs levied on raw materials imported to make animal feed.

In the long run, it would promote the cultivation of corn and soy beans, he said.

Many delegates at the conference urged animal husbandry managers to draft appropriate long-term policies for the sector’s development.

Huynh Thanh Trung, director of Huynh Gia Huynh De Limited company, a poultry breeder owning a slaughterhouse, said authorities should calculate demand for cattle and poultry meat to draft plans for breeding.

Binh said no business would invest in a sector where authorities treat large-scale and small-scale operators in the same manner.

For instance, he said, when animal diseases hit certain localities, authorities quarantined and culled all animals regardless of the fact some of them are healthy and have been inoculated.

In such cases, authorities should allow the healthy animals to be sold in the market, he said.

Farmers Not Warned of Tariff Changes

In an interview after the conference, Pham Duc Binh, deputy head of the Vietnam Feed Association, told a local newspaper that before slashing tariffs on meat imports last August, authorities had failed to inform farmers.

They also failed to warn breeders to reduce their scale of production or advise them of measures to handle competition from imports, he said.

There are no authorities to check imported meat for quality in terms of excessive preservatives or banned food additives, he added.