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Econ prof-turned-solon seeks probe of ‘abusive’ rice traders

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University of the Philippines economics professor and Marikina Rep. Stella Luz Quimbo on Wednesday urged the Philippine Competition Commission (PCC) to investigate rice millers and traders violating the antitrust law and “abusing farmers by taking advantage of their dominant market position.”

The assistant minority leader noted that the inflation rate was down to 2.4 percent in large part to the drop in rice prices, which dropped by 2.9 percent.

But Quimbo observed that “while the price of rice we buy in the public market dropped by 2.9 percent, the price of palay (unmilled rice) sold by farmers to rice traders and middlemen plunged significantly more, by 17.48 percent.”

“In short, the farmers are shouldering the substantial portion of the reduction in rice prices. That’s just not fair,” she said.

“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,” Quimbo said.

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”.

Quimbo said the 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,” she said.

But 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 and to determine if it was properly utilized for the benefit of small farmers.

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