MANILA — Assistant Minority Leader Representative Stella Luz A. Quimbo (Marikina, 2nd District) urged the Philippine Competition Commission (PCC) to investigate rice millers and traders for violating the Philippine Competition Act, saying on Wednesday that rice millers and traders were abusing farmers by taking advantage of their dominant market position.
Quimbo — a Professor and Department Chair 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% in large part to the drop in rice prices, which dropped by 2.9%.
However, the economist alarmingly observed that “while the price of rice we buy in the public market dropped by 2.9%, the price of palay (unmilled rice) sold by farmers to rice traders and middlemen plunged significantly more, by 17.48%. In short, the farmers are shouldering the substantial portion of the reduction in rice prices. That’s just not fair.”
“This unfair situation points to a conclusion that rice millers and traders are abusing their dominant market power to the detriment of our 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 paid to farmers,” the lawmaker explained.
“We urge the Philippine Competition Commission to resolve soonest its investigation of rice cartels and open cases where necessary.”
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”.
The solon said that economic managers led by Finance Secretary Sonny 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.
“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 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.
She called on the Department of Agriculture to immediately report on the status for the RCEF during the upcoming budget deliberations.