Stop denials, cartel exists
Despite the ready information, the state investigating arms, such as the National Bureau of Investigation and the Criminal Investigation and Detection Group, came up empty-handed.
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Despite the ready information, the state investigating arms, such as the National Bureau of Investigation and the Criminal Investigation and Detection Group, came up empty-handed.
During a recent House hearing, Agriculture Undersecretary for Rice Industry Development Leocadio Sebastian was asked point-blank if a "mafia" was manipulating prices.
"I don't believe, Mr. Chair, [that] there's a rice cartel," Sebastian replied, followed by his long-winded explanation of how the grains market works.
In 2020, amid a recent spike in rice prices like recently, the Philippine Competition Commission was tasked to probe the price fixing by a group with a monopoly of the market, resulting in inconclusive findings.
In the research it did on the market, the anti-trust body found that, if it was anyone, it was the National Food Authority dominating the market due to its mandate giving it a monopoly in importing the grain.
"Given the uncertainties associated with the research findings, policy recommendations directly concerning competition in the rice market might be premature," the PCC said.
It, nonetheless, cited two exceptions: "One is the need to abolish the NFA import monopoly, the other is the need to liberalize investment rules in rice processing and trading, opening up the sector to foreign competition."
Subsequently, in 2019, former President Rodrigo Duterte signed the Rice Tariffication Law or RTL that essentially removed the NFA's grains import functions and opened importation to traders.
Karl Kendrick T. Chua, a World Bank economist and then the Socioeconomic Planning Secretary, said the law was the best model the government could implement to balance the grains market.
The ultimate goal was to provide enough supply to bring down rice prices.
The law also established the Rice Competitiveness Enhancement Fund or RCEF, which provides targeted assistance to farmers from tariff proceeds.
The RCEF has an annual appropriation of P10 billion for six years to fund programs for farm mechanization, seed development, propagation and promotion, credit assistance, and extension services.
In the first few years of the RTL, the increase in importation did not hurt local rice production.
In 2021, palay production increased to 20 million metric tons, 3.5 percent higher compared to 2020, due to an increase in the buying price of palay.
Another key goal of the law is to rein in inflation since rice is the clincher in the price of the basket of commodities that determines monthly cost increases.
So, is the rice cartel fiction or fact? Sebastian said it is a myth, while the PCC said it needed more data to establish its existence.
Both agencies should ask Duterte, who has been tracking syndicates since he was mayor of Davao City.
In a National Security Council meeting sometime in 2018, the former president was told of the extraordinary increase in rice prices.
Without hesitation, he picked up the phone and called someone who received the patented Rodrigo Duterte throw-down. The person on the other end was the supposed head of the Manila rice cartel, which dictated the supply and prices of the staple grain.
Duterte said those behind the cartel were well known. Despite the ready information, the state investigating arms such as the National Bureau of Investigation and the Criminal Investigation and Detection Group came up empty-handed.
In one of his State of the Nation Addresses, Duterte repeatedly warned "rice hoarders, cartels and their protectors."
"You know that I know who you are. Stop messing with the people. Power sometimes is not good, but I hope I will not have to use it against you," Duterte said.
"Consider yourselves warned; mend your ways now, or the full force of the state shall be brought to bear upon you."
President Ferdinand "Bongbong" Marcos Jr. has repeatedly blamed the cartel's practices for the recent rice price shocks and vowed to end their abuses.
Whoever dominates the rice business is hurting from the free market program on rice.
So now even the DA official said the mafia does not exist. How can the government dismantle a figment of the imagination?
BBM should consider kicking out of the DA the people who may have a hint of involvement in the cartel.
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