Quimbo: Probe rice cartels, traders for possible abuse amid low price of palay

MANILA, Philippines — Marikina 2nd District Rep. Stella Quimbo compelled the Philippine Competition Commission (PCC) Wednesday to probe rice millers and traders for possible violation of the Philippine Competition Act by abusing farmers through “unfair” and “severe” reduction of palay (unmilled rice) prices.

During the weekly press conference of the House Minority bloc, the Assistant Minority Leader and a member of the PCC prior to her being elected to Congress, noted that inflation was down to 2.4 percent in large part to the drop in rice prices, which dropped by 2.9 percent. But she said it was alarming that farmers could be shouldering the substantial portion of the reduction in rice prices.

READ: Inflation hits 2-yr low; BSP seen to cut rates

“While the price of rice dropped by 2.9 percent the price of palay dropped by over 17 percent so hindi ho dapat ganun kalaki ang disparity ng pagbaba ng presyo ng bigas at presyo ng palay. On the supply side, the burden of the price reduction seems to be falling larger on the small farmers instead of the rice millers or traders,” Quimbo, an economist, explained.

“Sa akin pong pag-analisa, tila itong inflation numbers na ‘to seems to suggest the ugly head of rice cartels… it’s possible na baka may paglabag po ng Section 15(g) of the Philippine Competition Act,” she added.

In a separate statement, Quimbo said that the “unfair situation” points to a conclusion that rice millers and traders could be abusing their dominant market power to the detriment of our rice farmers, which she said was a clear violation of section 15(g) of the Philippine Competition Act.

Section 15(g) of the PCA states that 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”.

Magsasaka Rep. Argel Cabatbat, meanwhile, pointed out that his data even bared that palay price has decreased by 37 percent or as low as P11 to P12 per kilo since the implementation of the Rice Tariffication Law, which replaced the quantitative restrictions on imported rice with tariffs or taxes. He warned that this could lead to the death of the major staple’s industry.

“Sobrang baba ng palay umiiyak na ‘yung mga magsasaka… Dahil sa tarriffication law, ‘yung agrarian reform natin nagiging agrarian return. Kung hindi natin maa-address ito agad talagang mamamatay ang industriya ng palay at bigas dito sa ating bansa,” Cabatbat warned.

“Gusto ko lang pong linawin sa lahat, ang interes magsasaka di bumabangga sa interes ng consumers. Ang ibang bansa ang kanilang magsasaka mayayaman pero napakababa ng presyo ng bilihin… Walang bansa ang uunlad kung mahihirap ang magsasaka,” he added.

Quimbo said that while the Rice Tariffication Act “has helped reduce rice prices,” studies should be made on its effect to farmers, as well as its implementation and use of the P10 billion Rice Competitiveness Enhancement Fund (RCEF) under it.

“Has the RCEF been maximized so that it can achieve its intended purpose, to prevent the closure of small farms that are willing to change their methods and improve their efficiency levels so that it can compete against cheaper imported rice? This is one of the hard questions that must be asked and answered,” stressed Quimbo.

The RCEF is a fund created under the Republic Act 11203 to help small domestic farmers compete against the expected deluge of cheaper imported rice. This would be sourced from the tariffs imposed by the government on imported rice.

Quimbo said the Department of Agriculture should immediately report on the status of the RCEF during the upcoming budget deliberations.  /muf