Competition Issues in the Chicken Meat, Chicken Egg, and Pork Markets of the Philippines
Abstract
This study probed the supply chains of the Philippine markets for chicken meat, chicken egg, and pork; and identified several competition issues that present or may potentially lead to violations of the Philippine Competition Act (PCA).
In the chicken meat supply chain, vertical integration in the production segment through contract growing was found to likely lead to an oligopolistic market and possible abuse of dominant position, one of the prohibited acts under PCA. There were reports that such abuse may already be in play in its transportation and consolidation segments.
The practice in livestock auction markets to simply formalize pre-arranged trading agreements instead of being sites for competitive bidding was another identified violation. Common to all three supply chains was the limited access to credit that greatly restricts the market participation of small players.
Small scale participants were being edged out of the market due to the competitive edge of capital-rich players. While having high capitalization is not illegal, limited market participation due to financing constraints may later lead to a highly concentrated market, which may pave the way for abuse of dominant position.
To conform with the PCA, it is recommended that backyard farming be encouraged and promoted to increase market participation of backyard farmers, the private sector and the government pursue a credit guarantee system that will benefit small scale producers, locally registered meat establishments be upgraded to National Meat Inspection Service-accredited facilities, the dimension of smuggling be incorporated as a competition issue, and the practice of livestock auction markets of pre-negotiated bidding be overhauled.
