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Fools in suits

The warehouse and storage facilities are controlled by the mafia which makes it easy to create artificial conditions to which the market reacts by raising retail prices.

When a ranking Department of Agriculture official was asked in a recent Congress hearing what steps the agency had taken to break the rice cartel, he replied that he did not believe that a “mafia” existed.

Coming from a high DA official, the statement revealed that nothing was being done to stop the syndicate that everyone in the industry knows about since, to the authorities, it does not exist.

In the reenacted Anti-Agricultural Smuggling Act of 2016, smuggling, hoarding, profiteering, and forming cartels for agricultural and fishery products are considered economic sabotage and are non-bailable offenses for which a long jail term could be meted out.

The strengthened law, however, lacks strong teeth against government officials who are in cahoots or protect the syndicates.

Contained in the proposed bill is a provision indicating that any government officer or employee found to be an accomplice in the commission of the crime will “suffer the additional penalties of perpetual disqualification from holding public office, exercising the right to vote, from participating in any public election, and forfeiture of employment monetary and financial benefits.”

The bill is pending in both houses of Congress. With the slow grind of justice in the country, a public official looking for a fast buck will not hesitate to risk his job in exchange for a huge payback.

The recent series of events showed the markets are being manipulated by the big players in the sugar, vegetable and rice businesses.

These syndicates are known to be deeply entrenched due to their connections with government bigwigs who facilitate their domination of the markets either through edicts or the use of public resources.

In the most ridiculous situation, the recent spike in onion prices was found to be artificial since farmers were even throwing away their harvests because of low farmgate prices, thus there was no reason for prices to surge.

Later, it was exposed in a congressional hearing that a cartel had succeeded in manipulating the onion market to create a condition that would require its importation, from which its members would make a killing.

The warehouse and storage facilities are controlled by the mafia which makes it easy to create artificial conditions to which the market reacts by raising retail prices.

The ultimate goal is to coax the government to allow importation from suppliers in overseas markets that are also flooded with the commodity, The cartel rakes in profits from both the high markup and the kickbacks from the overseas suppliers desperate to sell their surplus.

The woeful victims are the Filipino farmers whom the cartel boxes out of the market. In extreme cases, these farmers just throw away their harvest since they cannot afford to transport their products without the middlemen who are also in the pocket of the cartel.

The same goes for the rice industry, where the market was manipulated for a different reason, which was to kill the rice tariffication law that kicked the National Food Authority out of the import business.

Rice prices then surged to as high as P56 a kilo, which pushed President Ferdinand Marcos Jr. to impose price ceilings.

The NFA used to have a  monopoly on importation, but that resulted in acrimonious confrontations at the apex of government.

The tariffication law, in turn, opened importation to all grain traders and relegated the NFA to buying rice from local farmers.

Under the new anti-smuggling bill which has the endorsement of Mr. Marcos, an Anti-Agricultural Economic Sabotage Council headed by the President or his designated permanent representative will be formed.

The proposed body will have the power to investigate and file charges, as well as freeze violators’ funds, properties, bank deposits, placements, trust accounts, assets and records.

The creation of the body looks good on paper but in the real world, it might just add another layer of bureaucracy and source of corruption unless the cartel, which DA officials claim does not exist, is dismantled.

Chief Presidential Legal Counsel Juan Ponce Enrile has a simple solution for breaking the cartel, which is for the government to confiscate all the rice overstock and let the owners of the warehouses prove that their huge inventory is legitimate.

Such a move would prompt the traders to release more rice into the market to avoid confiscation.

The imposition of the price cap on rice indicated that the prices are artificial since the markets are now selling at lower than the manipulated prices despite conditions being constant.

An expected bumper harvest is also prompting the prices to go back to normal, after the attempt of the cartel to create a price shock to support their effort to return to the old ways.

To know the real situation, President Marcos goes out of his way to see what is on the ground. His underlings, particularly at the Department of Agriculture, should do better.

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