PCC wants farmers to be more prepared for competition

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Philippine Competition Commission (PCC) logo

By Gillian M. Cortez

THE Philippine Competition Commission (PCC) said the government should do more to prepare farmers for competition, citing the example of rice farmers, who were not ready to compete with cheaper foreign grain when imports were opened up.

PCC Chairman Arsenio M. Balisacan said the government should invest in agricultural productivity, and not just in rice, where farmers have been exposed to competition with exports under the Rice Tariffication Law.

Mr. Balisacan said there are “many things (that) affect profitability” of farmers which should be addressed by the government.

“We need to raise productivity of farmers. Government should put more resources in agriculture particularly in irrigation; research and development; access to credit; access to information and technology,” he told BusinessWorld.

He added “The long-term problem with agriculture is our inability to raise productivity. That has been our problem for decades. You have to invest in infrastructure, irrigation, new varieties, and animal species.”

He noted that the Rice Tariffication Law already protects farmers with a high level of tariffs for imports, which he describes as the “highest tariffs” for any sector of the economy.

The PCC is currently investigating uncompetitive practices in the rice industry, after traders turned unwilling to offer “fair” prices to farmers due to competition from imports, which are cheaper than domestic rice despite the high tariffs. The inability of private traders to buy palay, or unmilled rice, at anywhere near the government support price of P19 per kilogram has forced government agencies to organize direct-buying initiatives to prop up farmer incomes.

At the same time, retail prices have not fallen as much as expected, suggesting that middlemen have been reaping the benefits of still-high selling prices alongside falling acquisition costs.

Mr. Balisacan said he cannot reveal much about the investigation but added, “We have done our initial scoping and our initial study of the sector.”

“We are seeing what accounts for this behavior in the market; why the retail prices are still what is expected; and why the farmgate prices have fallen sharply,” he added.