DOJ starts crackdown on unscrupulous rice traders

MANILA, Philippines- In line with its aim to crack down on rice hoarding and overpricing, the Department of Justice has started filing cases against businessmen believed to be taking advantage of the perceived rice shortage, Justice Secretary Raul M. Gonzalez said. "We started prosecuting [traders] already. We started in Cebu," the Justice chief told reporters yesterday in Malacañang. Mr. Gonzalez said his agency will also file charges against more than a hundred warehouse owners from Bulacan. He said the campaign against unscrupulous trading practices will continue until the prices of commodities have stabilized. Data from the Department of Agriculture’s Bureau of Agricultural Statistics showed that as of April 2, retail prices of commercial rice range from P28 to P48 per kilogram while National Food Authority (NFA) rice stayed at P18.25 a kilogram. Mr. Gonzalez said businessmen found guilty of unscrupulous trade practices will be liable for economic sabotage, which is punishable with lifetime imprisonment. He also lashed at rice traders who earlier declared that they will hold a "rice holiday" to protest the revocation of their licenses. "That [revocation of licenses] is just temporary because we have to be sure that even legitimate ones who have licenses do not [commit] abuses. That is the situation and they should understand. If they do not comply, then we will be forced to cancel their licenses." Last month, Malacañang ordered the revocation of licenses of all NFA retailers and palay dealers to stop the diversion of lower-priced rice for the higher-priced commercial rice. The order involved the nullification of all traders’ licenses and requiring them to reapply under stricter rules. Agriculture Secretary Arthur C. Yap said his agency will strictly impose a one retailer-one passbook policy. A passbook entitles a trader to an allocation of about 30 to 50 bags of NFA rice per week. Mr. Yap said his agency has received reports that some traders have as much as 50 passbooks. Higher farm-gate price Meanwhile, President Gloria Macapagal-Arroyo has increased the farm-gate price of commercial palay to P17 a kilogram from P12. Mr. Yap said the NFA will only buy commercial palay in areas where the farm-gate price is low or below P12 a kilogram. Cabinet Secretary Ricardo L. Saludo said government, financial and social security institutions will present on Tuesday their plans to use 5% of their 2007 budget surplus for rice production and other pro-poor projects. On Wednesday, the President ordered government agencies and state-owned corporations to allocate 5% of their budget surplus to fund projects and programs aimed at improving rice production. A total of P4.85 billion worth of public sector surplus is expected to be used in increasing rice production. The President also ordered state colleges and universities (SCUs) to allow their gymnasiums to be used as rice warehouses. "I am instructing the SCUs to make their gyms available for warehousing," Mrs. Arroyo said. She also ordered Mr. Yap to coordinate with the Armed Forces of the Philippines to make military trucks and aerial logistics available for delivery and distribution of rice. For his part, House Deputy Minority Leader and Bayan Muna party-list Rep. Satur C. Ocampo said in a statement, "The NFA must increase its procurement capacity and go beyond its annual 1% procurement of local production. Otherwise the increase in palay prices will only have minimal effect on farmers’ income." NFA Administrator Jessup Navarro admitted that the NFA bought only 1% of the palay production in the past two years. Mr. Ocampo said that in the countryside’s semi-feudal landscape, the bulk of the harvest goes to landlords in the form of high land rent, unjust production sharing, usury, payment for the rental of farm equipment, and other forms of landlord exploitation, and only a small amount of the harvest remains at the hands of farmers. In a related development, the Catholic Bishops’ Conference of the Philippines (CBCP) has blamed the government for the perceived rice supply shortage. In a statement entitled "Give Us This Day Our Daily Rice," CBCP President and Jaro Archbishop Angel N. Lagdameo said, "In response to a rice crisis, probably foreseen and unexpected, government has its eyes on wrong or lesser priorities, we are forced to import close to a million metric tons of rice since 1996, and this year imported rice will be more than two million metric tons." Mr. Lagdameo also hit the government’s response to the problem. "Rice importation is response to rice crisis. But there must be limit to importations. It should not be the permanent arrangement," he said. He said the government should focus on local production. "Some policies are needed to reverse the trend from overdependence on importation to making the rice production truly the backbone of our economy, as it is in other countries of Southeast Asia," he said. - Alexis Douglas B. Romero, Elizabeth T. Marcelo and Ira P. Pedrasa, BusinessWorld