Effect of trade liberalization on the Philippines carabao sector
1999
Costales, A. | Briones, A. (Philippines Univ., Los Banos, College, Laguna (Philippines). Coll. of Economics and Management)
The Philippine Carabao Development Program stabilized the carabao population in the country, improved genetic qualities, and developed competitive carabao-based enterprises. Prior to the GATT-WTO liberalization period of the livestock industry, tariff and non-tariff barriers were effectively in place, limiting the volume of imports of livestock products including carabeef. Under the post-GATT environment, the Philippines has allowed the entry of a minimum access volume (MAV) of livestock products equivalent to 3-5 percent of the historical average level of consumption under a preferential tariff of 20 percent. Imports beyond that were charged at 100 percent tariff rate beginning 1995 to be reduced to 40 percent by year 2005. Beef remained to be the dominant imported meat. Carabeef constituted about 37 percent of all meat imports. The average rate of increase in carabeef imports was close to 50 percent/annum while that of beef imports was only about 14 percent/annum. At current prices, Philippine carabeef is not competitive with imported Indian carabeef. The former was priced close to twice that of the imported meat. Prior to 1995, farm gate price of carabao increased at an average rate of 4.1 percent/annum. With trade liberalization, prices of carabeef/carabaos declined in the domestic market at about 8 percent/annum. However, it increased the possibility of importing carabeef or beef at lower import prices, thus, benefitting the consumers and meat processors who used carabeef as raw material. The carabao suppliers on the other hand, were able to offer more animals to the alternative draft power market. The increased supply lowered the prices of the draft animals which benefitted agricultural production where carabao power was intensively used. Since 1994, carabao inventory levels have increased
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