';"_',_.$ J._"V'_.')_4./"_A'//fj711" _"_IA_''e'g'_/. '''/'_i''il''/lgJ''Zli'_ili_l. //.6"g_:l" ")":/'_
cornand livestock have been suspended for further study until March 1993.
to estimate the net nominal and net effective protection ratesto takeaccount of the indirecteffects of theovervaluation of the
Ironically,the fearsexpressed by the DA, farmers, and producers of livestock and mixed feeds are largely unfounded, The shift from quantitative trade restriclions to use of tariffs does not imply lower protection. And less protection doesnotnecessarily|eadtolowergrowth rates. Infact, the proposed higher tariffs and longer adjustment period will not only be against the interest of the country's economic recovery and those of consumers', but will also be against the short-andlong-terrninterestsof thecorn-
domestic currency due to both theindustrialprotectionsystemanddisequilibrium in balance of payments.
¢i'_"x" _/'Yl"';'7717if9_Ii ""
Tablelpresentstheprotectionrates forcornandotherfeedingredients. Note that the initial tariff rate for corn stipulatedinEO8ismuchhigherthanwhathas been historically provided under quantitative controls. Even the stipulated tariff of 50 percent by 1996 is only about the sameastheNPRfor1990,thehighestfiveyear average NPR achieved over thepast ,=- To page_0
) 8. orn-Livestock Industry?* livestocksectoritself. Indeed, the
#.4C. DAVID .RCH FELLOW ' -' .... --
'
sary,and will only delaytheachieveprovisions ment of world of the
Table1 NominalandEffectiveRatesofFeedIngredients (%) _..--
competitiveness and sustainable
__ 1980 _
Nomhal Protection Rate Effectiv_ Ptotectlon Rate EO 8 1990 1992 1996 1980 _ 1990 •
growth of the sector, precisely the aims of trade liberalization. Com
Structure of.Protoction To analyze the direct effects of trade pOliCy oneoonoixdcincentivesin thecomli_>_, the nominal (NPR)1and effective{BPR)_protectionratesfor livestock ]mx_ucts and feed ingredients are examined
inhistorical
perspective
and
in.
comparison with the agriculture and manufacturing sectors and theproposed tariffs in EO 8. Border prioL_ are corP vetted by<> the equilibrium exchange rate
48 (50)
Soy_=_ meal
17 (50) 59
Coprameal Vlsh/meat meal
-4 5
0
wheatf=eda_r_ _,;1_,o_=_ _im.,l= for hr¢ediag Mix__,
io
(io)
l0
3o
75
50
20
38-77
3 3 lO, 3
3o
Figur*s in W_thesis refer _, book lariff rate. =L.S, C.abeailla, "Economic Incentives and Comparative Advanlage in the Livestock Indusl.-y," Pros Working Paper No. 83-07. Makati: Philippine h_stitul_for Development Studies, 1983. ,u. w. Ro_egrantand L. A. Gonzales (¢d.). The Corn [.a'veslock Seclor: Performance and Policy Implications, IFPRI and Philippine Department of Agriculture, December 199[.
9
May - June 1993