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TURNING POINT: The Cartel Almighty

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NAAWAN, Misamis Oriental (MindaNews / 21 April) – Every time we have a shortage of essential commodities, whether onion, garlic, sugar and rice, government authorities are quick to blame cartels. It’s almost a knee-jerk response.

The Philippines Competition Commission defines cartels as “businesses conniving to manipulate the market to their advantage (that) cause significant harm to consumers by engaging in coordinated anti-competitive behavior such as price-fixing, bid-rigging, output restriction and market allocation.”

In their modus, cartels may resort to smuggling of highly demanded staples, as well as to undermining the farm gate price of local produce by various means to control the market. They could sink low the farm gate price by advancing to farmers loans for production inputs or the provision of actual farm inputs such as seeds, fertilizers, pesticides, small farm implements, including some amount to sustain family need during the waiting period, and payable upon harvest, the price, of course of the produce, is inescapably dictated by the source of capital.

But are cartels in this country that powerful, such that the government with all its might, cannot wiped them out of existence? 

The Department of Agriculture (DA) is the primary watchdog on the country’s food security. With the President of the Republic himself at its helm, it has all the resources as its disposal to watch and monitor stocks, supply and demand, and the import, including the smuggling of essential commodities.

Surely, with the bottomless intelligence fund of the Executive Department, the intelligence unit of the Philippine National Police, National Bureau of Investigation, Bureau of Custom, Philippines Ports Authority, Department of Trade and Industry, National Food Authority and Armed Forces of the Philippines, among others, know who these cartels are, and can pinpoint to law enforcers on the ground the locations of their warehouses and hoards. Sweeping raids can be conducted and illegally acquired or undocumented stockpiles can be confiscated, assuming, of course, that law enforcers are not bought. The confiscated commodity may be flooded to the market to lower the price and destroy the barriers of the artificial supply of the same.

The cartels can be demolished if the government really wants to, or if those in authorities exercise political will. The narrative would be different if the cartels are under their protection, or worse, their creation.

Consider, for instance, the authorized importation of 440,000 metric tons of sugar under Sugar Order No. 6. This importation created so much noise because the permit to import was given by DA to only to 3 handpicked importers with their respective allocations, to wit: All Asian Countertrade – 240,000 MT; S&D Sucden Philippines – 100,000 MT; and, Edison Lee Marketing – 100,000 MT.

Many sectors in the sugar industry were aghast by the DA move, because historically, each authorized importer is allocated only around 10,000 to 20,000 metric tons each. The three favored ones were given 10 – 20 times more than the usual quota.

What is utterly dumbfounding was that All Asian Countertrade already imported 260 containers of sugar shipped in three vessels in the name of the three DA-favored importers, the import of which was carried out prior to the issuance of Sugar Order No. 6. 

A sugar shipment without the necessary permit, for all intent and purposes, is smuggling. Yet the DA cleared said shipments by issuing a memorandum declaring that the sugar shipments that arrived prior to the order will be part of the import allocation of said company, and should be released from where it is being held.

By its look the three handpicked importers are just one huge cartel navigating sweepingly and sweetly the economic and political waters.

If what we are witnessing here is not a mighty cartel in motion with strong hold in our government, then I don’t know what this monster is in our midst. What is certain is that this monster is here to devour us. 

(MindaViews is the opinion section of MindaNews. William R. Adan, Ph.D., is retired professor and former chancellor of Mindanao State University at Naawan, Misamis Oriental)

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