Local cartels
All politics is local. All economics is local too. Running a province or a city is pretty much like running a country minus the armed forces and foreign affairs.
In a sense, Bohol is lucky to have a governor who was once a Cabinet member and a member of Congress. Art Yap has a good idea of the big picture from agriculture to infrastructure. His nine years in Congress representing his province also gave him the ability to translate big picture concerns to local. In the course of our freewheeling conversation last week at Panglao Bluewater Resort, Gov. Art mentioned his problem with keeping food prices reasonable. Take fish, he pointed out. The price of fish goes out of bounds during the off season.
He tried talking to the fish traders, but he was rebuffed. Since it is a problem of supply, Art convinced Frabelle to come and sell fish in the hope of bringing down prices.
But Frabelle doesn’t have the market network of the fish traders. They boycotted Frabelle. The local fish trading cartel showed the governor who has power in the province when it comes to fish prices.
The battle has just begun and it isn’t just about fish. Gov. Art is feeling the pressure from Boholanos who are reeling from rising food prices. Here is a reaction I got to my column last week on Bohol from Ares Gutierrez, a journalist I worked with at the Manila Chronicle in the ‘90s.
“Sir, ang problema sa home-province ko ... the cost of living is sky-rocketing. Presyong turista na halos lahat, especially in Panglao island where I come from. Locals can no longer afford simple ‘luxuries’ like seafood. Sumobra ang development, pero napabayaan ang welfare ng residents.”
Well, Ares, your governor is aware of the problem. That’s why he tried to deal with high fish prices. It is also not just fish, but all sorts of food stuff.
When I forwarded to Gov. Art the complaint of Ares, he responded, “we are dealing with that.”
I am sure similar situations exist in towns and provinces across our archipelago. In the bigger cities where Manila-based companies like SM and Robinsons have branches, it is easy to call the attention of their head offices if the local branches seem to be excessively pricing. They can also help minimize the power of local trading cartels.
Food cartels have been a long-time problem. That’s why the Kadiwa stores were established during the Marcos era. There was a Cabinet member in charge of food logistics, Jess Tanchanco. His responsibility started with rice and expanded to other things including canned food.
Being in Metro Manila doesn’t exempt us from food cartels. During PNoy’s watch, a strong garlic cartel was created with the help of the Department of Agriculture. It got so bad that former justice secretary Leila de Lima had to recommend dismantling the national garlic action team formed by the former agriculture secretary.
Investigation by DOJ’s Office of Competition then led by assistant secretary Geronimo Sy showed that eight farmer cooperatives benefited in the allocation of permits by the Bureau of Plant Industry for garlic importation. These farmer cooperatives are controlled by one person.
Asec. Sy found out there was actually no shortage of garlic. In fact, the group said there was more than adequate stocks of garlic.
Having cornered the supply enabled the group to dictate the high prices. Sadly, the consumers were screwed with the help of the Department of Agriculture and the Bureau of Plant Industry.
We know there is a national trading cartel for rice and there are local versions as well. There are likely to be similar cartels for all sorts of vegetables and other foodstuff at the local levels.
I am not sure if government knows the extent of the problem, specially at the provincial and town levels. The Philippine Competition Commission has a national view. Perhaps it is a good idea for them to go local as well.
While government shouldn’t meddle in how the market functions, at least theoretically, it is unfortunate that local conditions are far from normal. Only government has the power and resources to make sure the market functions as it should.
On paper, DTI has the responsibility to assure reasonable prices at the retail level. But DTI doesn’t have the national reach to do that. Beyond announcing a suggested retail price for various commodities, no violator has gone to jail as a result of DTI action.
That’s the other thing… the retail price is “suggested”. How can they sue someone for not agreeing to the suggestion? It has to be mandatory.
We are now seeing governors stepping in to help rice farmers deal with traders by buying directly from farmers. We should see more governors and mayors dealing with other local trading cartels because every local situation is unique.
Making sure the prices of foodstuff remain fair is an important role of government, national and local. High food prices can cause social dissatisfaction with more serious consequences.
I got an e-mail correcting a previous column which said Shiela Coronel is dean of Columbia’s School of Journalism.
“That is not correct. The dean of that school is Dr. Steven Coll. Shiela is below him, reports to him, and Sheila is the academic dean, much like a dean of students, etc. She is not the dean of the school or its faculty (and she does not have a doctorate).”
Okay… that just proves my point… Even for a professional school, the college dean must have a doctorate.
Unfortunately, the current CHED chairman and UP Board of Regents chairman Popoy de Vera thinks he has the power to appoint his driver as dean if he so desires and a majority of the BOR agrees. One of the deans he appointed does not even have the license to practice his profession, much less have a doctorate.
Amend the UP Charter to correct this anomaly and shield academics from politics.
Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco