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 Overcoming AFTA ( ASEAN FREE TRADE AREA ) Threats

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Posts : 28
Join date : 2009-08-05
Location : GenSan

PostSubject: Overcoming AFTA ( ASEAN FREE TRADE AREA ) Threats   Fri Sep 04, 2009 12:45 am

Quote :
Greetings my dear colleagues and friends around the world!

An alliance of agriculture organizations has asked President Gloria Macapagal-Arroyo to defer the reduction of poultry and swine tariffs to 0-5 per cent in 2010 under the AFTA-CEPT (ASEAN Free Trade Agreement-Common Effective Preferential Tariff) agreement. The current tariffs of poultry and swine are 40 per cent and 35 per cent, respectively.

Alyansa Agrikultura is composed of federations and organizations representing all agricultural sectors.

In a 10 August 2009 letter to the president, the group proposed that the Philippine government adopt the original Department of Agriculture (DA) position taken last April that the government seeks a 5-year suspension of full implementation of tariff cuts in 2010 under the AFTA-CEPT scheme.

Subsequently, the Alyansa was informed that this could not take place, reports ABS-CBN News.

The Alyansa commended the Philippine government for asking exemptions for the 0 to 5 per cent tariff imposition for rice and sugar, but requested that this Philippine position be expanded to include at least poultry and swine for exemption. [The current 40 per cent tariff on rice, classified as highly sensitive, will be cut in 2012.]

According to the United Broilers and Raisers Association (UBRA), the farm gate price for live chicken in the Philippines is P66/kg, which is 41 per cent higher than Thailand’s P48/kg.

The National Confederation of Hog Farmers, Inc. (NCHFI), meanwhile, said the farm gate price of swine in the Philippines is P85/kg, which is 38 per cent higher than Thailand’s P60/kg.

“Though the current AFTA-CEPT rates of 40 per cent and 35 per cent for poultry and swine give adequate protection of these sectors, drastically and suddenly reducing these rates to 0 to 5 per cent less than five months would jeopardize the livelihoods of the poultry and swine producers at a time when jobs are scarce and poverty is increasing,” Alyansa Agrikultura Chair Ernesto Ordonez said.

Statistics provided by Alyansa’s Salvador Umengan show that ASEAN countries export 2.4 million tons of chicken per year, and import 404,000 tons. For swine, AFTA countries export 570,000 tons and import 80,000 tons.

“The ASEAN exporters for poultry and swine are likely to target the Philippine market, because the new 0 to 5 per cent tariffs will render our poultry and swine producers at a great price disadvantage. The 0 to 5 per cent tariff rate is a good goal, but we need a deferment of its implementation to get the needed time to adjust to this challenge and save our farmers’ existing jobs,” Mr. Ordonez added.

Too late, Mr. Ordonez. The AFTA is something that the Philippines should have prepared for a long time ago. The country, sad to say, did not — and from the looks of it, other ASEAN countries do not — seem to be sympathetic. [This reminds us of Alexander Graham Bell's thought on preparation: "Before anything else, preparation is the key to success."]

The AFTA 2010 is an example of an external threat looming for several years in the horizon. It will impact on corn, sugar, as well as feeds, chicken and pork. The entry of feeds and meat will ultimately reduce demand for corn. The Philippine industries were given a long lead time [17 years!], but defenses have not been installed.

Dr. Rolando Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agribusiness, sees pressure from various sectors to postpone the full implementation of AFTA in 2010. Doing so will however affect the country’s credibility in carrying out a long-term commitment.

Our word is our bond. We have to fulfill our commitment to diplomacy with the ASEAN Member Countries by upholding the ideals and spirit of AFTA-CEPT agreement signed on January 24, 1992 in Singapore.

There is still a way to minimize the negative aspect of AFTA come January 1, 2010. In the next installment, I will endeavor to present the major steps to gain market share, profitability and sustainable competitive advantage during the AFTA implementation.

Many thanks.

Jaime Abella Sison, DVM
From VKVVLV E-group

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