Malaysia-Poultry farming.

MALAYSIA--improving poultry farming.

Poultry farmers will study the production process of leading chicken exporters in Southeast Asia to prepare the local industry for competition with low-tariff imports next year, an industry leader said yesterday.

Gregorio A. San Diego, Jr., chairman and president of the United Broilers and Raisers Association (UBRA), said his group is finalizing this week a research program to study the production process of Thailand and Malaysia.

"We need to know if we have a chance to survive...imports [with lower tariffs] may flood our markets," Mr. San Diego said in a phone interview.

Under the country’s commitment to the Association of Southeast Asian Nations Free Trade Area-Common Effective Preferential Tariff scheme, the tariff rate on dressed and live chicken imports will be cut to 5% next year from 20% this year and from 30% last year.

The industry faces influx of poultry meat from Thailand and Malaysia, which currently costs P42-P44 per kilogram to produce, a third less than local cost.

The country imported 45,772 metric tons of chicken and chicken preparations last year, up from 45,074 MT in 2007 and 32,680 MT in 2006, data from the Bureau of Agricultural Statistics (BAS) show.

The research, which will run for two to three months, will cost the industry group P500,000.

"We will first look into their production process. And then we will concentrate on what is doable in the Philippine setting," Mr. San Diego added.

For instance, local electricity prices are double of those in Thailand, he said.

Other production advantages of neighboring countries include low labor costs, steady supply of the feed ingredient yellow corn, and modern poultry houses, Mr. San Diego added.

The Agriculture department expects poultry production, which accounts for 14% of total agriculture output, to grow 5.4% this year from 4.71% last year amid a rise in chicken layers and breeders.

Value of poultry production increased to P46.650 billion last year from P44.552 in 2007 and P44.454 billion in 2006, BAS data show.

However, UBRA expects the sector to grow just 3% this year, against the government’s 5.4% estimate, due to dampened consumption amid the economic slowdown.

Meanwhile, Roderico R. Bioco, chairman emeritus of industry group Philippine Maize Federation, Inc., said that "our problem [in corn production] is the lack of infrastructure. In Thailand, almost 100% of their production is covered by infrastructure [like post-harvest facilities]."

The government should encourage the private sector to build post- harvest facilities by giving more incentives like tax breaks, Mr. Bioco said in a phone interview.

Lack of post-harvest facilities account for up to 15% of yield losses.

To date, the country has only four operational corn centers, all in Mindanao.

Last year, corn output fell short by 4% at 6.9 million MT against a 7.2-million MT target because of high fertilizer prices and tropical storms in the first half of the year, BAS data show.