MANILA (Mabuhay) – High garlic prices were due to collusion and cartel in the garlic industry.
The Department of Justice (DOJ) has completed its report on the garlic industry that saw big spikes in recent months – reaching a high of Php 287.06 per kilo in June 2014, which is a staggering 74% increase within a one-year period and more than 100% increase from average prices.
Justice Secretary Leila M. De Lima on Wednesday said that as directed by President Benigno S. Aquino III and after a comprehensive evaluation, the main finding can be summarized into three major points:
- there was no shortage of supply and, in fact, there were more than adequate stocks of garlic;
- majority of the ‘import permits’ issued was granted to only one preferred group; and
- due to a cornering of supply, this group can dictate the high prices.
The demand for garlic is largely supplied by imports such that 73% are imports and 27% are local produce.
The importation process requires an “import permit” from the Bureau of Plant Industry (BPI) of the Department of Agriculture (DA).
“We also find that the formation of a National Garlic Action Team (NGAT) by the DA is unnecessary, unhelpful and actually contributed to the problem,” De Lima said.
“We are recommending its (NGAT) abolition and the establishment of a fair and transparent system that will allow competition in the garlic industry consistent with the dictates of economic justice,” she added.
According to De Lima, the National Bureau of Investigation (NBI), which is already investigating the matter, will gather further evidence to prosecute the personalities mentioned in the report, as well as the BPI officials who may have been in collusion with them, with the end in view of filing the appropriate charges.
In the 32-page Report on the Price Increase of Garlic for the period June 2013 to June 2014 conducted by the Office for Competition (OFC) of the DOJ the major findings are:
The BPI’s primary mandate is to restrict or control the importation into the Philippines of plant products, which could be a source of plant pests and, for that purpose, to issue Plant Quarantine Clearance (PQC). The BPI has no authority to utilize the PQC as effectively an import permit and allocate the volume of garlic to be imported;
The lack of clear-cut guidelines and established procedures in determining the allocation of import permits has made the BPI system prone to partiality, manipulation and collusion. The flawed permit system abetted the establishment of a garlic cartel, possibly with the collusion of some BPI and DA officials;
Importation of garlic in the country is controlled mainly by at least four known individuals and allied interests through a web or series of dummy entities duly accredited by the BPI. In particular, a person named Lilia M. Cruz, alias Leah Cruz, cornered at least 75% of the total garlic importation in the country by virtue of such import permits; and
The price of imported garlic, considering all incidental costs in its shipment, should not reach as high as Php 350/kilo, even factoring in the increase in trucking charges and related costs.
Because of these, the OFC recommended that the NBI should pursue the leads and gather further evidence to prosecute the personalities mentioned in the Report as well as the BPI officials who may have been in collusion with them.
It also recommended that the permit system currently lodged with the BPI be removed. The BPI should only be concerned on implementing its primary mandate, which is to issue the Sanitary and Phyto-Sanitary Import Clearance (SPSIC) to prevent entry of plant pests in the country.
Likewise, it was also suggested that impartial standards and clear criteria be adopted in the grant of these SPSIC to legitimate and accredited importers without any subjectivities.
Moreover, it recommended that the DA should consider either the abolition of the NGAT, or reconstituting it only as a policy team and not as an allocating entity.
The Report will be endorsed to the Office of the President (OP) and the relevant agencies for consideration. (MNS)