Beware of rice shortage when gov’t sets price cap
Price control on rice is dangerous.
Once the Department of Agriculture sets a maximum suggested retail price starting Monday, Jan. 20, the staple will vanish from market stalls. Retailers will stop selling rather than lose money.
Secretary Francis Tiu Laurel’s problem will worsen into rice shortage.
Shortage will incite rampage. Recall the looting in Rizal after Superstorm Ondoy in 2009, and in Leyte after Super Typhoon Yolanda in 2014. Starving folk know no law.
Tiu Laurel finds unacceptable present rates of P62-P64 a kilo: “There should be no P60 per kilo of imported rice. It’s profiteering.”
Under the new Anti-Agricultural Economic Sabotage Act, price gouging, smuggling, hoarding are non-bailable life-term offenses. Fine is five times the value of products involved.
Tiu Laurel’s maximum suggested retail price will be P58 per kilo of imported stock.
He seems to anticipate doomsday, and so confusedly says, “It’s not a suggestion, it’s not a price cap either.”
That there’s a rice price cartel is certain. Agri-sector Rep. Nicanor Briones says that less than 10 importers-wholesalers control three-fourths of supply.
The House Murang Pagkain Supercommittee recently invited seven importers, wholesalers, warehousers, millers and dealers. “Three of the seven are all of the above and thus dictate rates,” Briones laments.
Federation of Free Farmers chairman Leonardo Montemayor cautions Tiu Laurel against going after market vendors. “There are too many of them, they cannot cartelize retail rates,” adds his brother, FFF national manager Raul Montemayor.
DA has no exact count. But before the 2019 Rice Tariffication Law, the National Food Authority required all grains businesses to register: wholesalers, dealers, warehousers, truckers, millers, retailers. More than half of the 75,000 who signed up were market retailers.
Importers-wholesalers-dealers sell stocks to retailers at high rates. The latter make only P2-P5 per kilo after deducting stall rent and labor costs.
Why can’t Tiu Laurel go after the true cartelists – the few that Briones points to? Is it because he knows that high Customs officials formed the cartel and are protected by a VIP – Veritable Influence Peddler?
President Bongbong Marcos should waste no more time convening the Council that he heads under the Anti-Agricultural Economic Sabotage Act. Four months since he signed it, his subalterns are still drafting the implementing rules.
The Council consists of Secretaries or Usecs of Agriculture, Justice, Finance, Interior and Local Government, Transportation, Trade and Industry, Anti-Money Laundering Council and Philippine Competition Commission.
BBM still relies on the 2016 Anti-Agricultural Smuggling Act. Under that law, Customs must go after cartelists.
But what if no less than BBM’s Customs appointees are accomplices of the smugglers, hoarders, price manipulators?
Cartelists undervalue and under-declare rice imports.
Customs issues weekly reference rates based on grain quality: five-, ten-, 15- or 25-percent broken. Cartelists fake import values lower than Customs’ reference rates, and so pay only 15-percent import duty instead of the normal 35 percent.
In case the true import values are higher, cartelists declare only half of the volume, again in order to avail of lower tariff – “palubog” or hidden in Customs lingo.
The Montemayors propose a maximum suggested imported rice profit. That way, DA can force importers and wholesalers to add on only P5 per kilo to their million-ton shipments. Market vendors can add P8 per kilo.
At the present import rate of P32-P45 per kilo, consumers will buy at only P45-P58.
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The New NAIA Infra Corp. has unearthed another festering racket at the Manila International Airport. A passenger brought to NNIC chairman Ramon Ang’s attention the plight of baggage porters under a longtime private contractor.
Forced on the porters by their boss is a daily quota of 100 suitcases each, for which they charge passengers $1 apiece. If they fail to meet the target, they are made to pay the shortfall out of their own pocket. Yet they receive less than minimum wage.
For fear of losing their jobs, porters start work as early as 6 a.m., logging heavy loads for 13 hours. They have no overtime pay.
The exploitation has been going on for more than a decade. In 2014 newspapers reported the heavy quota of 45 bags a day, when porters usually averaged only 30.
The private contractor more than tripled the quota in 2022, when he last got a contract extension from MIA authority.
NNIC, which took over MIA operations only four months ago, said it is “taking the complaint seriously. These porters are not directly employed by us. But as the airport operator, we have a responsibility to maintain standards and ensure that all service providers treat their employees fairly, respect their rights and comply with labor laws.”
The porterage contractor was involved in the overpriced, substandard construction of NAIA Terminal 3. Past Malacañang appointees at MIA granted him cheap lease of hectares of cargo-handling space, which he subleases at high rates.
Another racket: MIA holds the land title to the airport complex. But courts have ordered the closure of two inner gates based on land claim of certain individuals.
The closures have denied cargo handlers direct access to the cargo area. One company beside the area enjoys virtual monopoly.
Cargo business losses will affect NNIC, whose income and huge payments to MIAA depend on briskness of all airport businesses.
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