THE Department of Agriculture (DA) said on Thursday its decision to discontinue the maximum suggested retail price (MSRP) scheme for pork was the result of lobbying by the hog industry, which argued that production remains constrained by African Swine Fever (ASF).
Agriculture Secretary Francisco Tiu Laurel, Jr. clarified that the DA is withdrawing the pork MSRP “at the request of industry players.”
“While the industry tried to comply with the MSRP, the severe shortage in swine due to ASF, combined with strong consumer demand, has made it increasingly difficult to keep pork prices down,” he said.
The MSRP had been set at P300 per kilo for a whole slaughtered pig, P350 for pork shoulder and hind leg and P380 for pork belly.
Agriculture Undersecretary for Livestock Constante J. Palabrica said on Wednesday that vendors were not complying with the MSRP likely due to high farmgate prices, reportedly as high as P290 per kilo.
Mr. Laurel said pork retail prices remain high, “with industry groups pointing to the ASF resurgence as a key factor disrupting supply and dampening production.”
Since the first outbreak in 2019, the national hog inventory has declined from about 13 million head to just 8 million, according to the DA.
DA spokesman Arnel V. de Mesa told reporters on Thursday that the hog industry cited the need for a “recovery period” from ASF.
The MSRP will be revised, he said.
Compliance with the pork MSRP was below 5% as of May 2, against 30% on April 1.
Alfred Ng, National Federation of Hog Farmers, Inc. vice-chairman said the MSRP “failed” because “less than 15% of retailers followed the MSRP, claiming higher transfer prices from middlemen who in turn blame farmers,” he told BusinessWorld.
He said the DA’s failure to control the viajeros — the consolidators who link farms with dealers — was “the actual cause of the failed MSRP scheme.”
Mr. Ng said producers have to “sacrifice P2,000 per pig to cooperate with the DA.”
“How else will farms recover from the millions of losses the past year?”
“DA always says farmers have a 30% profit compared to viajeros with 10% and retailers 5%. In reality, farmers need a minimum of four to six months before they can convert their pigs to cash,” he said.
He said the actual profit of pig producers is only between 5% and 7.5% because they have to deal with animal diseases.
Mr. Laurel, meanwhile, said the lifting of the pork MSRP will not lead to a sudden spike in prices as markets also deal in cheaper imported pork.
Pork imports hit 53.598 million kilos in February, up from 38.994 million kilos a year earlier.
The DA said it will focus on buying hogs from farmers for P230 per kilo and distribute these to key slaughterhouses.
The DA is piloting a direct-sourcing scheme involving Food Terminal, Inc. (FTI) and Charoen Pokphand Foods PLC (CP Foods).
State-owned FTI has been supplying a Caloocan slaughterhouse with 100 live hogs daily from CP Foods since April.
The DA is hoping to pursue similar arrangements with other farm companies like Pilmico Foods Corp.
Mr. Ng welcomed the direct-sourcing strategy but noted that “many farms” refuse to sell to the DA because of its 30-days-to-pay terms.
Mr. Palabrica on Wednesday described the mode of payment for the direct-sourcing program as a “credit on delivery” scheme.
He said about P5-7 billion is earmarked for the program, adding that the FTI sells the hogs at no markup, while the cost of delivery to slaughterhouses is absorbed by the partner company.
Meanwhile, Mr. Laurel said the DA has hit the minimum access volume (MAV) quota for meat imports.
“Same breakdown as last year,” he said, noting that the allocation remains the same pending tariff negotiations with the US.
“Whatever changes we will make to the MAV allocation, it will be in 2026,” he said.
Meat Importers and Traders Association (MITA) President Jess C. Cham told BusinessWorld he supports an increase in the MAV.
“After all the current volumes were set 30 years ago when our population was 50% less, with lower per capita consumption,” he said.
“In addition, we are facing production shortfalls due to animal diseases such as ASF,” he added.
He noted that the delayed release of MAV allocations has “affected greatly the purchasing decisions of the licensees.”
The DA in April said it was hoping to overhaul the MAV system, which it said was being “exploited by a small number of accredited importers.” — Kyle Aristophere T. Atienza