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Husbandry unprepared to endure looming WTO tariff cuts: Experts
World Trade Organization (WTO) commitments compelling Vietnam to slash meat import tariffs could crush the domestic husbandry sector, experts warn.
Tu Minh Thien, Director of the Investment and Trade Promotion Center of Ho Chi Minh City, said the most important thing the husbandry sector had to do was make its products cheaper to fight a flood of inexpensive imports.
The Ministry of Agriculture and Rural Development needs to develop a comprehensive strategy for the industry, including plans to ensure low-cost animal feed, he said.
Pham Thiet Hoa, Director of HCMC’s Center for Agricultural Consultancy and Support, said the local husbandry industry is underdeveloped and low-tech, making its production output much lower than other countries.
However, the government has not provided any clear guidance to help grow the industry, Hoa said.
In fact, the government didn’t even warn breeders when it lowered meat import taxes last year, much earlier than the deadline set by the WTO, said Hoa. Therefore, breeders were left in the lurch with surpluses and no way to compete with cheaper imports.
The Ministry of Finance cut the tariffs below WTO-required rates last August to curb inflation, which peaked around 28.3 percent at the time.
WTO commitments only require Vietnam to cut the import tax on beef to 14 percent and on pork to 25 percent by 2012, but the tariffs were slashed to 12 percent and 20 percent respectively in 2008. Although poultry imports were not included in the commitments, the tax on those were also halved to 20 percent.
Although the ministry has raised tariffs on meat imports twice since last November after domestic farmers complained of being priced out of the market, tax adjustments can no longer be used as a defensive measure after the 2012 deadline.
Moreover, tariff hikes cannot help the domestic husbandry sector solve what experts say is its main problem: low competitiveness.
Hoa said that even before the August tax cuts Vietnam was already importing more meat and husbandry products than it could export. In the first seven months of 2008, the country had imported US$323 million worth of meat and dairy products, four times the value of its own exports in the sectors, mainly honey and piglet meat, he said.
In January-August last year, more than 103,400 tons of chicken were imported, accounting for 40 percent of domestically consumed chicken. Frozen chicken imports cost just two-thirds of what local products do.
Thien said he was also worried about a large volume of specific poultry items that Vietnam imports, including chicken feet and heads, which have almost no value in other countries.
According to the Central Institute for Economic Management, the invasion of meat imports, together with higher animal feed costs and industry-crippling animal diseases, has forced 30 percent of families working in the husbandry sector to shut down or scale down production in less than a year.
Tran Ngoc Yen, a researcher at the Information Center for Agriculture and Rural Development, said farmers were not the only ones affected by cheap meat imports.
Twenty percent of Vietnam’s animal feed producers have also had to shut their factories, he said.
thanhnien, tbktsg
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