Govt to restore pork price caps
The Department of Agriculture (DA) will restore the maximum suggested retail price (MSRP) for pork by the first week of August at the latest to tame rising retail prices.
Agriculture Secretary Francisco Tiu Laurel Jr. on Thursday said the price cap would be retained at P350 per kilogram for pigue (leg/ham) and kasim and P380 per kg for pork liempo.
For sabit ulo (fresh carcass), the price limit is set at P300 a kilo. “That is our target for pork, to restore the MSRP for pork by the end of July or early August. But it depends, it may be delayed a little,” Tiu Laurel said on the sidelines of the inspection of smuggled goods on Thursday.
The DA scrapped the MSRP for pork effective on May 15 at the request of industry players and instead, it would develop a more effective policy to stabilize prices at the retail level. Tiu Laurel had explained that production challenges caused by the African swine fever, coupled with strong consumer demand, especially during the last midterm elections, made it challenging to lower retail prices of pork.
This resulted in low compliance rate among market vendors, compelling the DA to lift the MSRP and reevaluate its strategy to keep retail prices in check.
Intervention strategy
The pork MSRP was first implemented on March 10 “to prevent excessive pricing and ensure affordability for consumers, stabilize market prices, promote fair trade practices, and support both producers and consumers amid supply constraints,” the DA said in Administrative Circular No. 06 containing the MSRP order.
This was one of the strategies adopted by the DA to intervene in market prices, along with the direct sale of pork to the public.
According to the agriculture chief, the Food Terminal Inc. (FTI), a government corporation under the DA, would play a “huge role” to create more competition with market vendors to lower retail prices.
The FTI will purchase hogs directly from farms and sell these to retailers, earning a margin of P30 to P50 a kilo, allowing the entity to act as a middleman while earning reasonable profits.
The mechanism for the planned sale will be finalized, but Tiu Laurel said the DA is requesting a P500 million funding as a “standby money” for the massive rollout of the government pork sale.
However, he pointed out that the FTI has its budget to carry out the program without incurring losses.
“I’m thinking of something that doesn’t need to be subsidized by the government, something sustainable because the margins are really big. The middleman has an agent, another middleman and wholesaler … That’s what we are trying to eliminate and I can see that it’s easy to do because their margin is huge,” he said.
“We’re trying to cut out the middleman. That’s one of the directives of the President… they will not be completely eliminated, but the President’s order is to reduce the middleman,” Tiu Laurel told reporters during a market visit in Muntinlupa on Thursday.
The FTI is planning to purchase 150,000 metric tons of hogs for this year until January next year from Tarlac and Pampanga.
