Why is there a need to argue over the existence of the rice cartel? It has always been there.

During a House hearing of the newly formed Quinta Committee, or the Murang Pagkain Super Committee, questions were raised about alleged rice price manipulation.

The legislators said price manipulation trends over the past decade were reviewed, particularly spikes in rice prices from 2012 to 2013 and 2016 to 2018, to determine if the same network of smugglers and cartels was still operating.

The inquiry intends to identify “profiteers, hoarders, smugglers and cartels, and regulatory patrons” responsible for the recent price spikes and high prices despite an import tariff reduction from 35 percent to 15 percent and a 14-percent slide in global rice prices.

During the probe, several traders who denied any price manipulation and monopoly in the market were presented.

The House probe, with the approaching elections, appears to have an underlying agenda as in previous election periods when rice traders became the focus of those embarking on the campaign trail since the lawmakers are searching for entities whose existence is known to all except for them.

Another goal is to bring rice prices as close as possible to President Marcos’ target of P20 per kilo, according to one proponent of the probe.

“We will try to push the envelope as close to that as possible. What I can tell you is that it looks like there is a path to P30 per kilo,” one panel official said.

An estimate showed that as much as P20 of the cost of rice, at P50 per kilo, is lost through the maze of the manipulated market.

According to the joint panel’s research, the landed cost of Thailand rice is equivalent to P35.52 per kilo, while it is nearing P30 per kilo in the country which begs the question of where the benefit of the reduced tariff is going.

The farmgate price in Central Luzon is around P20.02 and assuming that milling yields 65 percent, the milled rice should come out to P30.08 per kilo. Even with a 20-percent profit margin, prices should be around P37 and not P50 per kilo.

“Something is amiss,” according to one of the members of the House body.

Previously, during a Senate hearing on the same topic, agencies were found to be in collusion with other agencies that were suspected of sitting on cases against cartel members.

Prices are high as a result of the artificial demand the cartel has created.

The reference to the distortion in the rice trade is the garlic cartel, where Bureau of Plant Industry officials were accused of connivance in cornering the volume of imported garlic and keep prices high by as much as 300 percent.

If a cartel is possible for other agricultural products, then rice being spared is quite improbable.

During the hearing, it was found that the cartel controls 75 percent of the garlic industry and the names of those involved were known but the agencies had not produced a report raising suspicions of those involved being protected.

The price of rice, the staple grain, would have an effect across the economic sectors which makes its market very lucrative, a reality that unscrupulous traders can’t miss.

Consider that during a bumper crop season, the country remains the biggest importer of grain, pushing its prices higher, including in the global market.

As a major importer, rice sold to the country is vulnerable to exploitation. In 2008, major exporters like India and Vietnam restricted exports for one reason or other.

Information from the producing countries turned out to be incorrect but policies to curb exports still were put in place and world prices started to surge.

Rice, thus, remains a gainful commodity both for the legislators who pretend not to be aware of a cartel in the market and the traders who deny it exists.