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Business

Fishy ban on salmon

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star

There is something fishy with the sudden interest of BFAR to implement a 1999 order to ban the sale of some imported fish in wet markets and supermarkets. Covered by the ban are salmon head and belly, and pompano.

The Ombudsman is also smelling something fishy. Ombudsman Samuel Martires is wondering why Fisheries Administrative Order 259 is being implemented only now. So, he ordered his investigators to look into “the anomalies that attended and/or resulted because of this recent implementation.”

FAO 259 only allows big companies, hotels, and restaurants to sell salmon and pompano supposedly to help local fishermen to sell their products to the market. Market vendors were threatened their salmon and pompano would be confiscated if they try to sell beyond Dec. 3.

Knowledgeable sources are not buying the public explanation of BFAR. Banning the sale of salmon head and belly, and pompano will not compete with small local fishermen who are now covered by a seasonal fishing ban.

A former DA official said there is no scientific basis for the ban on selling the fish species in the wet markets. The real reason is to protect commercial importers and let them gain windfall profit from their import allocation of 25,000 MT, which BFAR recently granted them. BFAR awards the quotas to around 20 importers without auction.

This is simply how bureaucrats accommodate rent-seeking of favored importers. I am told that “before galunggong was sold at P55/kilo from China and Vietnam, landed cost in Navotas was at P85 to P88 a kilo, but retail price averaged P240 per kilo.

‘Too much greed of guys involved in this racket.’

Apparently, big salmon exporters sell the salmon head and belly as byproducts almost for a song. That’s why these are sold cheap in wet markets. No wonder budget conscious housewives interviewed by GMA7 and ABS-CBN are at a loss after learning about the ban.

I understand how they feel. Salmon head and belly are tasty ingredients for sinigang. Salmon belly, in particular, is a personal favorite. Given the high cost of everything these days, this is one more anti-consumer move of this government.

As for pompano, it is one of my favorites too. I am told that this fish is now being cultivated in aquaculture ponds locally. Some may still be imported, but some are domestically produced. BFAR has to distinguish.

This reminds me of the onion and garlic cartel uncovered by a DOJ investigation led by then ASec Geronimo Sy. The existence of a cartel working with DA’s Bureau of Plant Industry (BPI) was determined by Sy, who is now back at the DOJ as undersecretary.

Sy, who headed DOJ’s Office for Competition (OFC), found out that the importation of onion in the country is controlled by the very same groups and individuals involved in the garlic cartel. The investigation report was released in January 2015.

“There is selective issuance of (Sanitary and Phyto-Sanitary Import Clearance) despite very clear guidelines against this,” the OFC report read.

The DOJ 24-page report said the SPSICs are issued to a “favored group of importers,” and done through the use of dummies and revalidation of the SPSICs despite guidelines that prohibit this.

The DOJ identified the group controlling the so-called onion cartel. This entity controls both the NGAT (National Garlic Action Team) and NOAT (National Onion Action Team). The primary figure in the so-called garlic cartel was identified by the DOJ report.

“Majority of the officers of the NGAT and NOAT are either the owners or head of an entity engaged in the importation of garlic and onion…,” the report read.

Like the NGAT, the NOAT was created to provide policy recommendations and serve as a coordinating body in addressing issues and concerns of the local onion industry.

From 2010 up to 2013, importer members of the group were shown to “have been favored and issued import permits for onion, based on Plant Quarantine (import permits) permits, according to the DOJ.

The DOJ also said the Department of Agriculture (DA) “failed to accurately monitor stock inventory and determine when imports should be allowed.”

This, even as the DA had “full knowledge” that the onion supply is insufficient to meet the demand.

“Considering that onion is also a prime commodity, there is good reason to believe... that the same cartel controlling garlic importation in the country has extended their operations in the onion industry…

“This report clearly confirms the intersection between regulator, competition, prices, and governance,” the report concluded.

The DOJ OFC recommended the abolition of the NOAT since “it only served the interests of a few” instead of protecting the local onion industry. The OFC also recommended the abolition of the 60/40 permit allocation scheme that allowed farmers to import onion during off-seasons.

Now that we are also facing high prices of red onion and scarcity in the supply of white onion, one wonders if this cartel is once again behind the problem. One wonders too if anyone went to jail on the basis of the DOJ report on the onion/garlic cartel.

Both cases, the ban on salmon sale and high price of onions, seem to tell us the DA, which controls BPI and BFAR, has failed to protect the interest of consumers. Instead, they are using their regulatory powers to help their friends in the trading cartels.

We shouldn’t be surprised if BFAR officials are also profiting from the importation of salt, which explains why they have not helped the local salt industry prosper.

Actually, same situation too at SRA. It is actually illegal to allocate any sugar for export until the domestic market is served. But putting aside some local production makes the domestic shortage larger and favored traders are given the import permits to cover the gap.

DOJ’s Office of Competition was operating before the Philippine Competition Commission took over responsibility for stopping cartels. I wonder how they coordinate their work because it is obvious there is much work to be done

Now the Ombudsman also gotten into the picture. But will we be lucky enough to get relief soon?

 

 

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco

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