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Increase in Rice Prices
Posted: Saturday, January 24, 2004
By Selwyn P. Nimblett
I am constrained to decry the amount now demanded from the consumer for a pound of rice, not because of a price increase but because of the monopolistic process from which it emanated. I was flabbergasted to learn that the decision to charge more for this staple product, on which the poor is so reliant, was made under the umbrella of "collusion" albeit in the light of day.
It is particularly disturbing that the present government has been espousing the most grandiose plans pursuant to its objective to achieve "Developed Nation Status" while it is shamefully neglectful of the basic needs of the masses. It seems that "Vision 2020" is not being pursued for the upliftment of the citizenry but to guarantee a legacy that would satisfy the personal aggrandizement of the administration.
Consider the following: "Price Fixing", which is the agreement between manufacturers or distributors to set prices, has been outlawed by developed nations to protect consumers from being gouged. When a group of importers act in concert to establish the price at which the product should be sold to the public, they cannot overcome the obvious charge. Do competitors show their books to one another? If not, how can the veracity of their cost claims be measured? Price Fixing serves to maximize the profitability of the least efficient of the group and to allow the more astute to be unjustly enriched. Did anyone in the administration ever hear about pure competition? It would be disingenuous to argue that anyone can import rice into the country because if even some retailers bring in a few containers of rice to be marketed at a lower price, they only satisfy a handful of consumers.
The Prime Minister and his cabinet did not create the problem but if they were sincere about helping the middle class and the poor, they would certainly have moved to outlaw the practice in question. They cannot plead ignorance, neither can they deny the harmful effects of importers "ganging up" against the consumer. They should not boast about programs like CEPEP on the one hand and allow major importers to extract the subsistence wages through monopolistic tactics on the other.
It is insulting to the people of the nation for the importers cited to suggest that freight rates are equal for every importer. The attempt to deceive is particularly egregious because at least one of those guilty of purported complicity in the agreement, National Flour Mills (NFM), must be well aware that if even all other factors are equal, product prices from the US rice suppliers are negotiable predicated on volume, delivery quantities and contract duration, and that shipping rates are based on similar factors. The notion that "one size fits all" is preposterous. When a government sits idly by while private enterprise is allowed to manipulate the consumer market, the administration should not be given a free ride.
This is a call to the Prime Minister to take steps, immediately, to outlaw Price Fixing. Developed Nation sounds great but remember, "while the grass is growing the horse is starving."
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