THE Philippine Competition Commission (PCC) is looking into the rice cartel, long believed to be in existence, but has been relatively unchecked by the government until now, when there appears to be increasing interest among the public to help stop anticompetitive practices of corporations.
PCC Chairman Arsenio M. Balisacan has confirmed that there is an ongoing review of the agriculture industry, with focus on anticompetitive practices in the rice industry.
Upon assuming office, Balisacan had already vowed to investigate the rice cartel, and had apparently emboldened whistle-blowers to complain against the cartel’s predatory practices that have led to increased prices of rice and keeping small farmers in a vicious cycle of debt.
Balisacan reaffirmed his commitment to dismantle the rice cartel, and announced in a recent news conference that there are many non-governmental organizations and concerned citizens who have lodged complaints.
Although the PCC has the power to investigate anticompetitive practices motu proprio, the PCC has called on the public to provide initial information that will jump-start investigations into anticompetitive practices in the various sectors of the economy, thus making the public a partner in information gathering toward building a strong case against cartels and monopolies.
“These [reviews] are not coming from nowhere. They are requests for us to examine, to review and, of course, we would want to do more, we certainly would want to do more,” Balisacan said. “We have also the motu proprio mandate to investigate anti-competitive practices but given the resources we have, we have to do everything. We have to prioritize our work, and make sure that these are well grounded in terms of analysis,” he added.
Other industries, which the PCC is looking into, are the cement and the power industries.
Balisacan declined to elaborate on the review of the international shipping industry, but confirmed that the review in the agriculture sector will focus on anticompetitive practices in the rice sector.
Details of the pending investigations into the two industries remain confidential to ensure that possible evidence of anticompetitive practices do not suddenly disappear when the PCC issues subpoenas and subpoenas duces tecum against those accused of violating the Philippine Competition Act.
However, a source from the University of the Philippines’s School of Economics, who is well versed in the rice industry, said these possible anticompetitive practices include the intentional lowering by middlemen of their purchase prices of palay (unmilled rice) to make sure that these products are bought at the lowest possible price from the small farmers.
The small farmers are, thus, forced to sell at a low price because all of the middlemen, who are part of the cartel, or worse, working for just one big retailer, offer the same price for their produce.
It is a common misconception that the Philippine Competition Act only safeguards against anticompetitive mergers and acquisitions, but it also guards against abuses of dominant position not only in terms of market share, but also in terms of economic standing.
Under Section 15 of the law, one of the unlawful practices that constitute abuse of dominant position is directly or indirectly imposing unfairly low purchase prices for the goods or services of marginalized farmers, fishermen micro-, small- and medium-scale enterprises, and other marginalized service providers and producers.
Thus, an arrangement among middlemen to keep their purchase prices of palay down will keep small farmers at their mercy, giving them no choice but to sell low and no chance to get out of the debt trap.
Balisacan said the PCC has included in its activities for 2017 the partnership with academe throughout the country, so that the schemes to directly or indirectly effect these anticompetitive practices can be disseminated and explained to the public.
Other activities for 2017 include the establishment of systems of market surveillance, expansion of operations and services to areas outside of Metro Manila, and the conduct of regular market studies and research.
Image credits: Sjors737 | Dreamstime.com