EDITORIAL - Suggested prices

The government has released maximum suggested retail prices for pork products. Like laws and rules in this country, however, the problem with the maximum SRP lies in enforcement.

Based on monitoring by the Department of Agriculture, compliance with the maximum pork SRP in 183 markets in Metro Manila as of May 2 was a dismal five percent. This was a drastic drop from the 30 percent recorded by the DA on April 1.

The maximum SRPs are P350 per kilo for pork shoulder, P380 per kilo for pork belly and ham, and P300 for whole pig carcass or sabit-ulo. As of May 2, however, retail prices of pork shoulder reached as high as P420 a kilo and pork belly, P480.

Low compliance could be due to the perception that there are no penalties even if caught ignoring the SRP. The maximum SRPs were issued on March 10. Two months later, the government is just getting ready to send notices to violators of the SRP.

It can be argued that as the term implies, the maximum retail prices set by the government are merely suggestions. But if this is the case, why bother announcing the price caps? Pork retailers are supposed to be guided by the law of supply and demand, setting their prices accordingly.

If the government deems retail prices in the wet markets to be unreasonably high, it should find out what is driving the trend. Is domestic production down, and why? The country’s hog industry reeled from African swine fever, but the threat is supposed to be abating.

Unfair trade practices could be fueling the low compliance with the maximum SRP. If this is the case, the government should identify those engaged in such practices, conduct a formal investigation and impose appropriate penalties.

Whenever the government sees the need to suggest price ceilings, it must see to it that there is a credible level of compliance. If people see often enough that there are no consequences for failure to comply, maximum SRPs will be seen as nothing but hot air – a futile attempt to rein in spiraling prices.