The Philippine Competition Commission will do well to investigate rice millers and traders for allegedly violating the Competition Act, a lawmaker said, claiming that they were abusing farmers by taking advantage of their dominant market position.
Assistant Minority Leader Stella Luz Quimbo—a professor and department chairman at the University of the Philippines’ School of Economics and a member of the PCC prior to being elected to Congress—noted that inflation was down to 2.4 percent in large part due to the decrease in rice prices.
The price of rice decreased by about 2.9 percent since the Rice Tariffication Law came into effect.
However, Quimbo said that “while the price of rice we buy in the public market dropped by 2.9 percent, the price of palay (unmilled rice) sold by farmers to rice traders and middlemen plunged significantly more, by 17.48 percent. In short, the farmers are shouldering the substantial portion of the reduction in rice prices.”
“That is just not fair,” she added.
This unfair situation, Quimbo said, points to a conclusion that rice millers and traders are abusing their market position to the detriment of the rice farmers. “It is a clear violation of section 15(g) of the Philippine Competition Act; rice millers and traders cannot abuse their dominance and severely undercut the price of palay bought from farmers,” she said.
“The Philippine Competition Commission should resolve soonest its investigation of rice cartels and file cases where necessary.”
She cited Section 15(g) of the Competition Act which states: “It shall be prohibited for one or more entities to abuse their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition” by “directly or indirectly imposing unfairly low purchase prices for the goods or services of, among others, marginalized agricultural producers.”
She said economic managers led by Finance Secretary Carlos G. Dominguez should be commended for their efforts to ease inflation, while the 17th Congress should be credited for passing the Rice Tariffication Act, which has helped reduce rice prices. “The administration’s economic team correctly diagnosed the inflation problem—it was a food problem. Congress, on the other hand, came up with the right medicine—The Rice Tariffication Act.”
However, while consumers benefited from this measure, said Quimbo, efforts must be made to study if the drop in rice prices caused the halting of food production of thousands of farmers. She likewise called for an urgent review of the Rice Competitiveness Enhancement Fund (RCEF) and to determine if it was properly utilized for the benefit of small farmers.
The RCEF is a fund created under the Rice Tarrification Act to help small domestic farmers compete against the expected deluge of cheaper imported rice. The source of the funds would come from the tariffs imposed by government of imported rice.
The House member called on the Department of Agriculture to immediately give an update on the status of the RCEF during the upcoming budget deliberations.