Sinag to DA: Go after smugglers
DO NOT PUNISH AGRI SECTOR
By Yolanda Sotelo
Saying the imposition of price control is to punish the whole agriculture industry for the crimes of a few identified individuals, an agricultural group called on the Department of Agriculture to go after the price manipulators instead.
In a position paper sent to Agriculture Secretary Proceso Alcala, the Samahang Industriya ng Agrikultura (Sinag)said the DA must pursue the leads of the Office for Competition-Department of Justice’s reports and file cases against individuals and their cahoots in government and smugglers of agricultural commodities.
The Sinag, an umbrella organization of agricultural stakeholders in the country, sent the position paper opposing the DA Order Number 7, which executes the implementing rules and regulations (IRR) of Republic Act 7581 or the Price Act, in relation to agricultural commodities.
The group said the individuals and smugglers “have been unmasked and identified by the series of Senate investigations the past months. These are the individuals that have succeeded in manipulating prices and they have never been legitimate players in the agriculture sector.”
The DA has temporarily suspended the implementation of the order, with Alcala saying the suspension will afford stakeholders additional opportunity to raise their concerns on the IRR of the Price Act of 1992.
In a press release, Assistant Secretary for Agribusiness and Marketing Leandro Gazmin said some groups also look at [some provisions of] the IRR as price control mechanism.
“We just look at it as SRP—a guide—and not a price freeze mechanism,” Gazmin said.
But the Sinag said the Price Act of 1992 only mandates price control during specific national or localized emergency situations.
“ A.O. No. 07 created a de facto price ceiling even in non-emergency situations by making it punishable to increase the retail price by more than 10% of the Suggested Retail Price, a provision that is not found in the Price Act,” the agriculture stakeholders said.
In effect, the Department has made itself a market regulator of agricultural commodities, it said.
It added that simple regulations and an accountable bureaucracy are enough governance tools, as proven over the years, to ensure competition in the agriculture sector.
“A.O. No. 07 cannot in any way go beyond the law it seeks to implement to the point of expanding or creating a new law. More so, when it arrogates upon itself the statutory powers of the President of the country to set prices during specific emergency situations and only for a 60-day limited period. (It) practically makes it discretionary to DA and its allied agencies like DTI to set prices. This discretion is too dangerous as it is always gravely abused in the absence of standards to follow.
The Sinag gave as example the report of DOJ on the reasons behind the sudden spike of garlic prices in the early months of 2014.
“The findings are damning: 1) there was no shortage of supply and, in fact there were more than adequate stocks; 2) majority of the import permits’ issued was granted only to one preferred group; and 3) by cornering the supply, this same group can and have dictated prices,” the group said.
It explained that at the time of the spike in prices of garlic, the demand for the commodity is largely met through imports (almost 73%), and that garlic importation requires a permit from the Bureau of Plant Industry (BPI), an agency under the DA.
“In short, the BPI has given most of the permits to a preferred group (cornering at least 75% of the total importation); this same group is also the main buyer/trader of garlic that are produced locally,” the Sinag said.
The same personalities involved in the price manipulation in the garlic industry are also doing similar modus operandi to corner import permits, thus manipulating onion supply and affect prices.
The report concluded that the DA failed to accurately monitor stock inventory and determine when imports should be allowed, despite knowledge of the country’s insufficient onion supply and using the same system of granting import permits to allocate imports, and that the importation of onion is controlled by the very same group involved in the garlic cartel.
The Sinag said the DOJ reports show that price manipulation of agricultural commodities only happen when there is a monopoly of supply by a single group and when there is evident collusion with the officials of agencies tasked to look after these commodities.
“Price spikes and profiteering, the very issue of the DA AO No. 07; only happens when a single group, with manifest complicity of government officials, control the supply of the commodity,” it added.
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