MANILA, Philippines — The Department of Agriculture is blacklisting 43 garlic importers over the resurgence of an alleged cartel on the commodity that has prompted a spike in local prices.
Agriculture Secretary Emmanuel Piñol will issue an administrative order that will ban 43 importers who were supposed to bring in a total of 70,000 metric tons (MT) of garlic for the first six months of 2017 but only imported 19,000 MT.
"A total of 43 traditional importers of garlic who were issued permits to be able to import are in the list that will be blacklisted," Pinol said in a briefing Wednesday.
"We will not allow them to import anymore because at the time when we need them to import, they did not import. And that is the first indication that there is a cartel," he added.
The department’s move came after Sen. Cynthia Villar, chair of the Senate agriculture committee, hit the DA and some of its official due to the resurgence of the cartel which reduces farmers’ income and weakens the economy.
The Philippines is heavily dependent on the importation of garlic as a measly seven percent of total consumption is from local sources.
"Yes, there is a cartel. There are groups of businessmen who manipulate or control the prices of the commodity to ensure that they make more money," Piñol said.
With the ban, there will still be 111 importers who can supply the 130,000 MT annual national consumption requirement.
The Agriculture chief admitted that over the years, the department failed to develop the garlic industry which resulted in smaller volume of production and thus resulting to cartel problems.
"It’s not easy to address because this is an institutionalized problem. The government in the past failed to invest in this, particularly on cold storage facilities which is very important for the industry," Piñol said.
He added that importers do not want to comply with their import permits because of the significantly higher price in China, where the Philippines sources majority of its garlic imports.
No DA officials in cartel
Pinol also clarified that no officials in his department are involved in the cartel after Villar threatened to file charges against those who are having connivance with importers.
"It is not the indiscriminate issuance of permits but because they just don’t want to import as they will not earn much which is unfair because if you are a legitimate businessman, you will continue to import for the sake of supply," Pinol explained.
The administrative order will also place the issuances of import permits for garlic directly under the Office of the Secretary.
Furthermore, the department is allocating at least P200 million next year for the development of garlic and onion as it targets to increase local production.
"We hardly scratch the bottom. We target to extend loaning programs, and establish pilot farms and cold storage facilities in Visayas and Mindanao," Pinol said.
The DA eyes to increase local production to at least 50 percent in the next five years through the expansion of approximately 20,000 hectares of agricultural land.
"How can we possibly stabilize the price with just seven percent production and it’s a seasonal commodity? We have to produce more so cartel will not be able to control the price," Pinol said.
Ilocos and the Cordillera regions are the largest producers of garlic.