Evidently, the government over the years ignored the only measure that could have reined in this monster called garlic cartel.
It refused to rip down its import controls over garlic, which the stinking cartel used to strangle supply and bloat the price.
Under the administration of Duterte Harley, the Department of Agriculture (DA) even ruled that garlic import permits must be done “manually.” Huh, in this digital age?
For years now, business wanted an open market for commodities like garlic, similar to the forex liberalization that wiped out the huge dollar blackmarket in the 1990s.
With import controls in place, the cartel could drive up the price of garlic to P200 per kilo, versus the P17 landed cost of imports and the P10 local production cost.
Recently, the prohibitive price again created noises in media, with sweeping accusations of collusion between government offices and the cartel.
Indeed, the conspiracy could only be possible because the government played god in choosing who could and could not import garlic.
Although we are still an agricultural country, we hardly grow enough garlic here, so we depend on imports.
The Philippines currently produces less than 7 percent of the total demand of about 130,000MT (metric ton) a year.
By the way, the world’s biggest producer is China, accounting for about 80 percent, and nobody even comes close.
Perhaps it is easy to understand why we are having trouble in this commodity, assuming that most of our troubles come from China.
Anyway, some sectors dragged the motorbiking Duterte Harley into this garlic cartel issue, mum as he was so far on it.
Why would the President not threaten the cartel by sending Supt. Marvin Marcos, or something?
As if it would solve the problem! Believe me, hundreds of other ill-bred guys would be willing to take the place of any prejudiced garlic cartel member.
For its part, the DA decided to ban 43 importers, because the sons of their mothers did not use up their quota issued by the government.
The brilliant idea was to take out those “importers” who actually did not import—was that it? And how would that create more supply to cover for the shortage that caused the price spike, in the first place?
In the long term, the DA nevertheless would want us to produce more garlic.
How long would it take to cover the shortage equal to more than 90 percent of our need? We would just have to plant garlic in more than 50,000 hectares of our extremely limited farmlands—and just to weaken the power of the cartel a bit, at that.
Years ago, the NBI also tried the wholesale filing of cases to dismantle the cartel, involving some 115 individuals, including government officials and a certain “Leah Cruz,” who actually went by her name Lilia Matabang (no pun intended).
As usual, nothing happened.
Let us be clear—cartels and monopolies could only exist because of government policies, such as during the regime of import controls from the 1950s to the 1980s.
According to one famous story, an individual made a killing with an exclusive permit from the government to import sardines—the food of the poor even then—and he eventually became “somebody” in business.
Anyway, similar controls persisted to this day. For all garlic importation, for instance, the PQS (Plant Quarantine Service) under the BPI (Bureau of Plant Industries) under the DA, must issue a clearance called SPS (sanitary and phytosanitary).
The PQS justified the SPS as the only way to guard the local garlic farmers against “infestation” from imported garlic.
Elsewhere in the world, the clearance must be issued by the exporting country, not the importing country, attesting that the garlic shipment met sanitary requirements.
Here the government would have to issue the SPS as a prerequisite to importation. What the…
Besides, how could the government protect the local garlic industry that almost did not exist?
Aside from the SPS, the DA also issued its own “import clearance,” supposedly to screen SPS on the ability of the importers, because some SPS holders simply sold the permits to actual importers—or most likely the cartel.
But why could the importers who bought the SPS not just get the SPS directly themselves? Aha—because the PQS only issued it to a limited few, making it a precious document, forcing the DA to screen the holders on their capacity to use it.
Such an intricate system of permits! Such a tempting system for corruption!
All that would not exist in an open market.