DA’s Dar calls corruption in pork MAV process unlikely but starts probe

Image via Flixtey / CC BY-SA 4.0

THE Department of Agriculture (DA) has formed a committee to investigate alleged corruption in the process of certifying that pork imports are within the minimum access volume (MAV) quota, qualifying them to pay lower tariffs, though Agriculture Secretary William D. Dar said the possibility of corruption in issuing the document is “remote.”

In a statement Wednesday, Mr. Dar said the discretion of the certification issuers in ruling that imports fall within the MAV quota is limited.

“We have created a special committee to look into allegations made by a lawmaker that there is a syndicate in the DA engaged in a payoff scheme,” Mr. Dar said. The committee will be headed by the chief of DA’s legal service, Armando R. Crobalde, Jr. It will evaluate the preliminary findings of the MAV Secretariat led by Executive Director Jane C. Bacayo. The committee has a deadline of the end of March to submit its findings.

Senator Panfilo M. Lacson alleged during a Senate session on March 15 that expanding the MAV could generate illegal payoffs of about P6 billion from importers seeking to get their shipments in under the quota, paying 30% tariffs. An out of quota shipment pays 40%.

The DA is proposing to increase the MAV for pork to 404,210 metric tons (MT) and lower the tariff rates for in-quota shipments to 5%-10%; for out of quota imports the charges rise to 15%-20%.

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The African Swine Fever (ASF) outbreak has greatly reduced hog numbers, creating a supply crisis which has threatened another inflation crisis, leading officials to seek ways to rapidly expand supply, including imports.

“We would like to emphasize that our objective in increasing the MAV and reducing tariff is to stabilize supply and price of pork,” Mr. Dar said.

Mr. Lacson had alleged that the people involved in the scheme collect P5 to P7 per kilogram from pork imports, and claimed that once volumes expand, they plan to collect P10 to P15 per kilogram.

Import certificates are issued to MAV licensees eligible to tap the yearly quota of 54,000 metric tons (MT).

Licensees unable to utilize 70% of their allocation are penalized via the recall of their unused volume for raffle to other qualified applicants.

“In addition to securing an MAV import certificate, licensees need to seek sanitary and phytosanitary import clearances from the Bureau of Animal Industry (BAI) to ensure that pork or other meat products are safe and disease free,” the DA said.

In a separate statement Wednesday, the Samahang Industriya ng Agrikultura (SINAG) claimed that the DA has not disputed its allegations on irregular volumes of pork being imported.

SINAG Chairman Rosendo O. So said: “In a series of hearings at the Senate, House of Representatives and the Tariff Commission, SINAG presented official records from the Bureau of Customs (BOC) from January 2020 to January 2021.”

“The DA never contested our claim as figures speak for themselves. And we are not wondering why after all this time, the DA did not check with importers or the suppliers of these importers on the true value of these imports,” he added.

Mr. Dar said at a virtual briefing Wednesday that the hog industry may take five years to recover with the implementation of biosecurity measures and antiviral products.

According to Mr. Dar, researchers at the Bureau of Animal Industry are currently testing and validating an ASF treatment dispensed by spray.

“If the antiviral products are proven effective to help eradicate the virus, this will be a game changer. If biosecurity measures are in place, including the antiviral compounds that can kill the virus upon ingestion at the initial stage, we can recover in three to five years,” Mr. Dar said.

On Wednesday, Senators adopted a resolution filed by Mr. Lacson that will create a Senate Committee of the Whole to hold an inquiry on the problems faced by the hog industry.

Mr. Lacson said in the resolution that the Senate committee will look into the impact of ASF on food security, the alleged payoffs associated with pork imports, and the DA’s proposals to increase MAV and reduce tariffs.

Separately, the Land Bank of the Philippines (LANDBANK) said it launched a new lending program worth P15 billion to assist hog raisers.

During the program launch Wednesday, LANDBANK signed a memorandum of agreement with the DA for the Special Window and Interim Support to Nurture Hog Enterprises or SWINE, which hopes to fund increased swine production.

Farmers can borrow to finance the procurement of inputs like semen or breeding animals; to set up feed milling operations; build hog raising facilities and acquire fixed assets; and access working capital.

LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said: “We aim to respond to the recovery requirements of our hog industry and contribute to ensuring food security,” Ms. Borromeo said.

According to LANDBANK, qualified borrowers can tap a short-term line or a term loan for up to 80% of their total project cost or financing needs, with a fixed interest rate of 3% per annum for three years, subject to annual repricing afterwards.

Permanent working capital loans are payable up to five years. — Revin Mikhael D. Ochave

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