THE Philippine Competition Commission (PCC) is closely monitoring the country’s rice sector to determine factors behind the huge gap of farmgate palay (unmilled rice) prices and the retail prices of rice.
“We have a memorandum of agreement (MoA) with DA (Department of Agriculture).
There’s this issue being raised about the possible anti-competitive practices and the observation that the retail prices of rice have not fallen as fast as the law [‘Rice Tariffication Law’] was expecting,” PCC Chairman Arsenio Balisacan said at the “Competition Policy Forum for Micro, Small and Medium Enterprises” held at Novotel Manila Araneta City in Quezon City.
“At the same time, some sectors are saying that farmgate prices have also fallen sharply following the [signing of the] tariffication [law]. We need to look at those closely, and we have to examine the market, marketplace, the interplay of several factors, and check whether those dynamics that you observe in the market are coming from anti-competitive practices,” he added.
Balisacan also said the PCC as part of the technical working group (TWG) formed, following the signing of the agreement that intends to have a better understanding of the situation and the rice market, to have a clearer picture of the situation.
“What we want to do is understand fully well, where these forces are coming from whether they are coming from the way we implemented the law, the tariffication, or the way various market players are reacting to the law. So it’s basically an understanding of the forces, so we have a more focused approach to our inquiry or investigation,” he added.
PCC Commissioner Johannes Bernabe added they will look at whether there is a concentration of dominant players in the market.
“What we are looking at is, given that there are middlemen, traders, millers, wholesalers, who are engaged in the distribution of rice to the end user of retail level, or there are players who are in a dominant position in certain markets for this middle phased transactions, then it is worsening the gap between farmgate and retail prices,” Bernabe said.
The PCC commissioner, however, clarified that on the issue of whether tariffication is a good thing or a bad thing, the unanticipated effects should be left to the policymakers.
“What we should be concerned about is whether middlemen, because of their dominant position in certain relevant geographic markets, or if they are engaged in some cartelistic behavior, should be investigated by the PCC and be taken to task for aggravating this price gap,” he said.