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Senators ask why the price of garlic goes up, up, away

By: - Deputy Day Desk Chief / @TJBurgonioINQ
/ 05:47 AM July 04, 2014

GARLIC TRADERS EARNING BILLIONS Holding a string of expensive bulbs, Sen. Cynthia Villar, chair of the Senate agriculture committee, says the surge in the price of imported garlic from P17 to P300 a kilo could translate to a profit of P26 billion a year for traders. The P2-million penalty for price manipulation is not deterring them. CONTRIBUTED PHOTO

MANILA, Philippines–“Who is to be blamed here? Why did we allow P17 per kg to become P280 per kg? We have a Price Act of 2012 [that created] the Price Monitoring Council. The council should have acted on this. This is a case of very unreasonable rise,” said Sen. Cynthia Villar, chair of the agriculture committee hearing the spiraling prices of basic commodities, especially garlic.

She later said: “We’re in the wrong business. We should go into garlic trading.”

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Villar chided Director Clarito Barron of the Bureau of Plant Industry (BPI) for deferring to the National Garlic Action Team (NGAT) to determine when to import garlic, regardless of the harvest season. She said this should be the job of the BPI under the Department of Agriculture.

“You’re the Department of Agriculture (DA), not the NGAT. As for the traders, let them trade. I’m not angry with the traders. You earn a reasonable amount. If your cost is P30 and then [you] sell it at P280, that’s a 900-percent profit. There’s no business like that. That’s too much,” she said.

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Traders earn billions

Traders are earning billions of pesos from the spike in garlic prices and don’t mind paying the penalty of P2 million for price manipulation, senators said yesterday.

The spike in the price of imported garlic from P17 to P300 per kilogram could translate to a profit of P26 billion a year, Villar said during the hearing.

The Price Act of 2012 imposes a penalty of imprisonment of not more than 15 years and a maximum fine of P2 million for price manipulation.

Sen. Grace Poe said the penalty did not seem to deter traders who were making billions of pesos from the spike in prices.

“As the chair observed, the traders are earning billions of pesos. If the penalty is P2 million for one importation, they could do the importation a number of times and not be worried by the P2-million penalty,” she said.

Prosecute hoarders

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In the face of growing public discontent over the spiraling prices of commodities, President Aquino on Friday ordered law enforcers to prosecute dealers who were hoarding commodities and profiting from high prices.

The average retail price of well-milled rice reached P42.19 per kg in early June, up 19 percent from prices a year ago. The farm-gate price of palay was recorded at an average of P20.83 per kg, or up 26 percent.

The price of garlic shot up to P300 a kg for the imported variety and P180 per kg for the local variety, prompting the Department of Agriculture to deploy rolling stores to sell locally grown garlic.

During the hearing, officials and industry players said the spike in garlic prices stemmed from price manipulation.

Villar and Poe admonished officials for being slow to act on the skyrocketing prices of garlic, from P17 per kg to P280 per kg, to the detriment of consumers.

They also demanded documents from them to identify the farmers’ cooperatives that sold their import permits to traders.

Initiative not enough

Victorio Dimagiba, trade undersecretary for consumer welfare, said they were monitoring the prices and also wanted to know the retailers who bought garlic at its landed cost of P17 and sold it at P300 per kg.

He assured the committee that the Price Act imposes a penalty of P2 million and 15 years’ imprisonment.

Poe thanked Dimagiba for his initiative but said this wasn’t enough.

“There has to be vigilance on your part. If you see that there is a jump of 900 percent, right away you should already call the attention of the DA. Right away, the DA should already call the attention of the co-ops that sold their rights to the traders,” she said.

List of co-ops

Poe asked the agriculture officials to submit a list of the cooperatives that were granted applications to import garlic so that the Senate could ask these cooperatives to which trader they sold the import permits.

The officials vowed to comply with her request.

At the Senate hearing, Dimagiba said price manipulation could be behind the spike in garlic prices.

“The facts show that,” he said in response to Villar. “The supply chain will be too long for the P17 to become P300. Perhaps we would need three ‘Yolandas’ to hit Luzon for us to reach P300.”

Dimagiba said garlic wasn’t scarce because he could still buy some at the public market at steep prices.

Assistant Secretary Leandro Gazmin of the DA’s Agribusiness and Marketing Assistance Service agreed with this.

“It never became scarce. So the conclusion is that there’s supply,” he said.

After the hearing, Villar said the agencies “in a sense tolerated” the price manipulation because they took long to respond to the spikes in prices.

Rosendo So, president of Samahang Industriya ng Agrikultura and chair of the Abono party-list, said garlic was not on the monitoring list of the Price Monitoring Council.

Dimagiba said garlic was on the list of prime commodities under the Price Act, even though it was not being monitored every day because it [was] “not a fast-moving item.”

“What I’m saying is that this should be listed in the commodities,” So said. In response, Dimagiba said the garlic would be on the monitoring list.

Raid in Bulacan

Acting on the President’s order, authorities raided a warehouse in Bulacan province, where rice from the National Food Authority (NFA) was allegedly hoarded and repacked into sacks with commercial markings.

The Criminal Investigation and Detection Group (CIDG) recovered around 5,000 sacks of NFA rice from Jomarro Star Rice Mill in Barangay (village) Abangan Norte, Marilao town, following surveillance operations.

This was aside from the 1,000 sacks of rice seized from a truck that was about to make deliveries to the warehouse, said Chief Insp. Elizabeth Jasmin, CIDG spokesperson.

Arrested were warehouse manager Juancho San Ruiz and 10 of his employees.

On Thursday morning, the CIDG caught a group of men red handed while they were repacking NFA rice into sacks with commercial rice markings.

Jasmin explained that with the modus operandi, NFA rice could be sold at a higher price meant for commercial rice varieties.

Led by Director Benjamin Magalong and Senior Supt. Ismael Fernandez, CIDG director in Central Luzon, the CIDG conducted the raid at the private warehouse reportedly owned by Roberto and Regina Pualengco.

Magalong said Ruiz et al. would be charged with violating Republic Act No. 7581, or the Price Act Law.

In an interview, Jasmin said the operation was in line with President Aquino’s directive to be vigilant against hoarders of NFA rice.

The alleged warehouse owners were not around during the raid.

In a report to Magalong, Fernandez said police conducted a weeklong surveillance operation prior to the raid.

“We also intercepted two 10-wheel trucks containing 1,000 more NFA rice sacks as these were being delivered to the warehouse,” she said.

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TAGS: Consumer issues, Cynthia Villar, Garlic, garlic price, Senate, senators
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