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PCC to investigate rice industry for anti-competitive practices

pcc to investigate rice industry for anti competitive practices 816x445 - PCC to investigate rice industry for anti-competitive practices

THE Philippine Competition Commission (PCC) said it has been invited to investigate the rice industry and advise the Department of Agriculture (DA) in identifying anti-competitive behavior like price-fixing and cartel-like behavior.

The PCC and the DA signed a memorandum of agreement (MoA) in Quezon City Tuesday covering “mutual advisory” assistance in any investigation of agricultural issues.

“The focus of our work is looking at the competition angle in the market. In effect, what we want to understand, in the case of rice, is what explains the behavior of the prices as we have seen this and whether one could attribute that to anti-competitive practices like cartel, abuse of dominant position, price fixing, and market allocation,” PCC Chairman Arsenio M. Balisacan said during the MoA signing.

Mr. Balisacan said the PCC will look into all segments of the rice industry, including traders.

The farmgate price of palay, or unmilled rice, has been falling since the enactment of the Rice Tariffication Law earlier this year, which liberalized the rice import market but made importers pay a 35% tariff on their inbound shipments, a rate that applies to grain from Southeast Asia.

The larger volumes of imported rice on the market has softened demand for palay, making traders reluctant to buy and causing the prices offered by private traders to radically diverge from the support price offered by the National Food Authority (NFA) which is currently at P19 per kilogram.

Reports of traders offering to pay as little as P6 per kilo have mobilized government agencies to organize direct palay purchasing efforts in order to establish an effective floor for the market, paying “fair” prices to farmers with government money, in the absence of the private traders from the market.

“The Competition Commission is a quasi-judicial body. It has investigative powers. The Supreme Court just issued the rules on inspection that will allow us to secure the data, evidence that we need by way of dawn raids or search warrants, so we’ll obtain the evidence that will prove the case,” he told reports after the ceremony.

Under the MoA, information will be exchanged between the agencies on matters regarding competition in agriculture, as well as other forms of cooperation, including investigative and enforcement support, and the creation of fact-finding bodies.

Mr. Balisacan said the food sector is a priority area for the PCC this year and in 2020.

The MoA formalizes preliminary efforts at coordination between PCC and DA staff, which can now take place without the prior approval of Mr. Balisacan and Agriculture Secretary William D. Dar.

“We assure the public that your government is working and the instrumentalities of the government are being fully and properly pursued so that at the end of the day we shall be able to have the consuming public have the right prices in the market and at the same time the see to it that the farmers will also have respectable prices for their palay,” Mr. Dar said. — Vincent Mariel P. Galang

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