Local Hog & Poultry Producers Cries Foul Over Unfair Tax Incentives to a Thai Company
The Board of Investments released a decision recently allowing Charoen Pokphand, a large agribusiness enterprise and Asia’s largest swine and poultry producer, to put up Charoen Pokphand Foods Philippines Corporation.
According to reports, Charoen Pokphand Foods Philippines Corporation is set to open its parent stock farms in Concepcion, Tarlac and Pangasinan and 6 broiler farms in Bulacan & Nueva Ecija that is expected to begin operations in February next year.
“All our hard work, blood, sweat and tears will be put to waste if the Thai company is allowed to operate here. It will not only kill the business of local producers who worked very hard for many years but will also be detrimental to the national economy,” a local producer, who requested anonymity, said.
CPFP has been given the green light to build a P2.32-billion integrated hog facility that will produce 3,647 metric tons of slaughter hogs, and six huge poultry farms, with an annual parent stock capacity of 25,453 heads producing 21,847 metric tons of chicken.
“What we are complaining is that CPFP, a foreign company, was given the license to operate a facility in our country with multiple tax incentives, including tariff-free importation of feeds and equipment. Local producers were not given these same incentives at all,” the local producer said.
With these fiscal incentives, CPFP will get a 6% to 10% pricing advantage over local poultry and hog producers, a huge disadvantage already because of the fact that chicken and pork are two highly price-sensitive commodities.
And once the CPFP facility is operational, its production output will bring about a flood of low-priced poultry and meat products in the local market, according to the local producer. According to them, this will kill the business of backyard, small and medium-scale hog and poultry producers. Even corn farmers, who have all waited for real substantial government support and subsidy, will be affected by the tax-free feed importation granted to CPFP, not to mention massive loss of jobs.
“The government is supposed to protect local business from the entry of foreign companies and unfair competition. With the (BOI) decision, the government is effectively killing the local industry, aside from causing the loss of jobs to thousands of Filipinos who depend on the local agribusiness sector in order to put food on the table,” the local producer lamented further.
The local producer even invoked the protection guaranteed by Section 1, Article XII of the Philippine Constitution for Filipino businesses, which provides for the State to “protect Filipino enterprises against unfair foreign competition and trade practices.”
“We can accept if our business was wiped out by natural disasters like typhoon or floods. We can easily rebuild it but the impact of this development is far worse than any natural disaster, and I don’t believe we can ever recover from it,” the local producer said.
photo via theaustinburgmill.com