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PCC probes alleged cold storage cartel

Refusal of storage access to onion farmers in favor of large traders

The country’s antitrust body said it would look into the alleged cold storage cartel in the onion industry, which had reportedly forced onion farmers to cut the prices of their produce by half.

In a statement on Friday, the Philippine Competition Commission (PCC) said the move was prompted by competition issues raised by the Department of Agriculture (DA).

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The issue involves four major trading firms in Nueva Ecija, which Agriculture Secretary Emmanuel Piñol said had closed down their cold storage facilities in time for the harvest season to force farmers to sell their produce at low prices.

The PCC stressed the importance of these facilities, which prolong the shelf life of onions after harvest season. Proper storage, PCC said, allowed farmers to keep their produce for an extended period and sell them during lean months.

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“The PCC will look into the alleged refusal of storage access to onion farmers in favor of large traders and will also evaluate if there are business agreements that are anticompetitive or enablers of cartelistic behavior,” the antitrust body said.

“Specifically, the PCC will examine whether there are competition concerns in the onion industry such as restriction of storage space or price manipulation by cartels, or whether the storage concerns are natural consequences of supply conditions,” it added.

The DA, however, can still act on the issue the best way it sees fit, according to the PCC.

“The timing of any investigation or advisory from another agency like the PCC should not prevent the DA from exercising its own judgment in suspending or allowing importation,” the PCC said.

So far, the DA has temporarily suspended the importation of bulb onions while waiting for the results of the probes conducted by the PCC and NBI.

The DA chief also said that the agency would give P200 million in working capital to cooperatives to enable them to buy their members’ produce “to protect them from price manipulation by traders.”

In light of recent events, the PCC mentioned the prospect of entering into a memorandum of agreement with the DA to harmonize their actions and objectives.

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“This cooperation is especially important in the face of the changes in the economic landscape of agricultural production and trade. Given the crucial importance of food and agriculture in the economy, particularly on the poor, the PCC will assert all its powers as provided for in the competition law,” it said.

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TAGS: Agriculture Secretary Emmanuel Piñol, cold storage cartel, onion industry, Philippine Competition Commission (PCC)
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