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‘Cartel’ let off hook by ministry

A woman organises cuts of meat at her stall in Phnom Penh’s Kandal Market in March 2015.
A woman organises cuts of meat at her stall in Phnom Penh’s Kandal Market in March 2015. Kimberley McCosker

‘Cartel’ let off hook by ministry

The Agriculture Ministry last week accused slaughterhouses across Cambodia of conspiring to form a cartel and engaging in price fixing while local authorities turned a blind eye, but has since said it has no plans to punish or even name the alleged perpetrators.

In a strongly worded circular dated February 15 and released late last week, the ministry said it had “observed that there is a cartel in the slaughterhouse business” and accused retail and wholesale slaughterhouses of “conspiring to fix prices”, as well as monopolising the Agriculture Ministry licences required to slaughter livestock.

It also called on local authorities, whom it accused of failing to enforce existing laws, to promote fair competition in the market.

The circular does not discuss the details of the alleged cartel, nor does it name the actors accused of conspiring to fix prices. Ministry officials have refused to provide any details of the investigation that informed the circular, saying the lack of names was part of the ministry’s strategy to move forward.

“In our report, we did not specifically address any individual or specific company,” said Sen Sovann, director general at the ministry’s General Directorate of Animal Health and Production. “The policy study’s purpose is reform the policy, and it is not intended to harm anyone.

“We do not want to create conflict,” he added.

Sovann did acknowledge that the alleged cartel and conspiracy was aided by local authorities, from commune-level officials up to the provincial Agriculture Ministry authorities, but said that no punitive measures against the offenders would be necessary.

“In the past, there was not a circular like this in place, so they just followed their mind,” he said. “Now, we have the circular in place, so things must be better.”

The lack of transparency and lax enforcement of laws set a bad example for future and current would-be conspirators and cartels, according to San Chey, country director of the good governance NGO Affiliated Network for Social Accountability (ANSA).

“If authorities found issues, but didn’t dare to release the identity of businesses, it is considered a big conflict of interest,” he said, noting that it likely meant the businesses were run by or closely linked to government officials.

The problems addressed in the circular had been plaguing livestock raisers in Kandal province for months, according to Srun Peu, director of the Cambodia Livestock Raisers Association.

Peu, whose organisation represents more than 4,000 animal raisers in the province, said that the circular’s accusations sounded plausible, noting his farmers had always struggled to get licences to use slaughterhouses.

“When we have no right to slaughter our own animals . . . the buyers don’t buy from us, or they offer us a low price, and we can’t do anything because we have no right to slaughter the pigs,” he said. “Having a licence to slaughter cannot help us earn higher profits, but at least it offers options for our members. In case there is no buyer, we can process the pigs by ourselves.”

Peu said that while his members had applied for licences to use slaughterhouses in the past, it was only following the February 15 circular that some began to be approved. Since then, 20 of his farmers had received their licences, and Peu said he expected more to get them in the coming weeks.

One farmer in Kandal province’s Kean Svay district said he received his licence in the past month after applying several months ago, but said he still lacked clarity on who had been blocking him from receiving the licence or whether the cartel had truly been busted.

The farmer, who requested anonymity because he said officials have previously harassed him for speaking publicly about issues in the pig industry, compared the process of applying for a licence at the provincial Agriculture Department to trying to “milk a tiger”.

“When I went to the department to ask to obtain a licence, officials there seemed to not to welcome me,” he said, explaining he was redirected to different officials several times.

“When I asked for the contact number for the right person, they said they don’t have it,” he said. “How could they not have the contact number of their colleague or employee?”

Oul Dorin, the chief of Kandal’s Department of Animal Health and Production, which is under the Agriculture Ministry, maintained his ministry had followed proper procedures in issuing licences. When asked about farmers’ complaints regarding the licensing process, Dorin first shifted blame to the Ministry of Economy and Finance, which does not issue slaughterhouse licences.

When asked again and pressed on the fact that his department was responsible for issuing the paperwork, Dorin rejected claims that it had ever been difficult to obtain licences in the past.

“If they have eligible slaughterhouses or bring the animals to slaughter at appropriate slaughterhouses, we always provide them licences,” he said, before hanging up on a reporter.

One of the circular’s stated goals was to lower the price of meat for consumers, which it said had been artificially inflated due to the cartel. It’s unclear if that has been successful.

Sovann, the ministry spokesman, said last week that since the circular had been promulgated, the price of meat had already dropped in Phnom Penh by about 4,000 riel (about $1) per kilogram.

But five vendors in Olympic and Boeng Keng Kang markets in Phnom Penh told The Post on Tuesday that the price of a kilogram of pork had remained steady for the past year, hovering between 18,000 and 20,000 riel, while the same was true of beef, which had remained between 35,000 riel and 38,000 per kilogram.

None of the vendors reported seeing a change in price in the past month, and all of them said the prices were similar across all vendors they had spoken with in the market.

Chey, from ANSA, said the circular’s lack of transparency made him doubtful it would be effective in encouraging fair competition in the market.

“The circular is to make things look good,” he said. “If there is just an announcement, but no penalties for those who created the issue or violated the law, then it sets a bad example . . . I am not hopeful about the efficacy of the circular’s implementation.”

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