by Rick Lowe
In 1996, the Minister of Agriculture (Mr. Pierre Dupuch, FNM) banned the import of bananas in favour of Bahamian growers.
Then in 2006, The Minister of Agriculture (Mr. Leslie Miller, PLP) threatened to ban the importation of eggs in favour of local producers.
Fast forwarding to 2012 the present Minister of Agriculture (Mr. Alfred Gray, PLP) threatened to impose a "ban on chicken imports" unless Bahamian wholesaler's buy 30% of their chicken purchases locally as the government policy states (The Tribune, Chicken import ban threatened, July 25, 2012).
As with the banana import ban and threatened egg import ban, the foreign chicken will find its way into homes because the consumer will get the product they want to buy, no matter the intention of the minister.
The danger with policies like this is the chicken that will be imported in spite of the ban might not be kept properly refrigerated heightening the chance of food borne illnesses etc because of the ill conceived public policy.
One argument is the imported chicken is cheaper so that's why people buy it. Well in the case of eggs, the imported product was more expensive yet the consumer still bought them.
Instead of the bureaucrats at the Ministry and Department of Agriculture trying to find out why Bahamians prefer the imported chicken and/or why wholesalers buy it, and encouraging Bahamian famers to compete, they prefer to use the coercive power of the state to force a behaviour they think is best.
Mind you, local farmers take huge risks with their personal money and time to make an attempt at farming and deserve our voluntary support if their product is what we want to buy. But instead of using the government to enforce a policy like a ban on imports, why not educate Bahamian consumers about the benefits of buying their product? How about taste tests? Also prove their product meets stricter standards for safety and are fed better food than the imports and any other reasons they think we should buy locally grown chicken.
As the Nassau Institute pointed out back in 2006; If the Ministry of Agriculture is allowed to enforce this policy, more businessmen can then seek protection from competitive imports. But just as it would be unconstructive to prevent Bahamians from buying and importing what they wish of other products – like food, clothes, furniture, appliances, cars etc…" banning imported chicken is equally rash.
It is unclear how a government minister could possibly force a business to buy a certain percentage of its chicken inventory from the farmers he chooses. What happens if they do not sell? Does the business person lose the money or does government reimburse them? I would think the latter as they forced the businessman to make a bad investment in the first place?
Let's hope reason will prevail and the Minister will use his soapbox to encourage people to buy locally instead of bully tactics that pit one Bahamian against another using tax dollars from all of us to pay for it.
History shows us that when one bad public policy fails the country will usually get another one.
So then,lets have a look inside Mr.Grays refrigerator & freezer & make sure he is only buying Bahamian.While we are at it,lets make sure every single member of parliament is doing the same thing.This is a bunch of nonsense,I always thought this was a free country.Maybe we should force everyone to vote them all out.
Hmmmm, the free trade/fair trade (protectionism) debate seems to show up everywhere these days. A general inclination to exclude government interference in any form, from trade versus a belief that trade is better off with rules to guide it and measures to protect the fledgling industries that would otherwise have no protection. Whilst I generally would incline to the former, when it comes to The Bahamas, I have to step back and ask the simplest of questions: what is best for The Bahamas?
I don’t know the answer to this question in respect of this latest protectionist measure, so I will abstain from judging the Minister’s decision, for the time being.
Fair enough S3S.
Care to offer a reaction to this question?
“It is unclear how a government minister could possibly force a business to buy a certain percentage of its chicken inventory from the farmers he chooses. What happens if they do not sell? Does the business person lose the money or does government reimburse them? I would think the latter as they forced the businessman to make a bad investment in the first place?”
I think the minister needs to stop pandering & tread very lightly.If only they would put the same effort into things like crime & justice we might get somewhere.I gladly by Bahamian products when the are good.I will not however buy rotten bananas etc.Gray is loosing it.
Morning Rick,
I would say that government intervention should never go as far as ‘forcing a (Bahamian) business’ to patronise another Bahamian business for the sake of ‘buying Bahamian’.
In the event such an ill-advised measure is taken, however, and one of two outcomes arise:
(i) the patronised business refuses to sell or
(ii) the patronised business is unable to service the sales order (the more common of the two), then the patronised business is the loser!
To implicate government directly in the financial loss of a particular firm would have too serious a set of ramifications for the economy …. yeah?
The role of government is merely to facilitate the business environment and create the conditions necessary for certain economic activities to take place – what you suggest is a step too far.
Thanks S3S but my point does not arise unless the government takes the peculiar step to force the wholesaler to buy product that does not sell.
If I read your response correctly you do not find it acceptable that the government can force one to buy a certain product, so why shouldn’t they pay for their “illegal” behaviour?
When government try to control free markets, Black markets, another form of the free market system, will emerge.. In America price controls and market rationing (World War II era) never worked as black markets thrived.. Black markets in Cuba thrive with the sale and exchange of goods on the streets of Havana..
The lesson for government is clear, let the free market alone and let the dynamic forces of price equilibrium determine economic fairness.. Government interference is not the answer and has never worked in the long-run..
Hear! Hear!
But don’t many of these government ministers gain some mystical power to fix everything once they’re chauffeur driven Tradewinds?
Dear S3S, I forgot to add this question when you mentioned “Fair Trade”: All trade is fair when two parties agree to a transaction is it not?
It is very skillful how the language gets manipulated to get a point across in the “fair trade” debate.
It’s like FTAA et al, they are only managed trade deals. Bureaucrats in different countries deciding what’s best for us all, whether we like it or not. And they’re not even elected!
Perhaps politicians are merely “children of a lesser god”.. This so-called mystical power you refer to Rick is only delusional power where politicians assume grandiose and even pompous images of themselves.. They vision is distorted by their ego and self-interest at the expense of the common interest of the people they profess to represent.. Perhaps this maybe why political corruption has become the order of the day from America to Great Britain all the way to our Bahamian shores.. We all love our country but some love themselves far more than they love the country they represent.. Sadly this self-interest cuts across ALL political parties and factions as political power tends to corrupt even the best of us..
It is very clear that government interference only makes matters worse for all parties concerned all over the world period.They should stay away from the free market altogether.Stop dictating to us.Somebody will have to pay for something & we all know who & what that will be,just more taxes for all.If anything,they should be working on reducing taxes.I agree with Rick,as soon as they’re chauffeur driven the power takes over no matter how dumb & stupid they really are.There is nothing “Fair” when government gets involved.
Hi Rick,
Short answer to your question – “All trade is fair when two parties agree to a transaction is it not?” – is yes, but only if being considered from a layman’s perspective or if taking a literal translation of Adam Smith: “Every business transaction is a challenge to see that both parties come out fairly.
However, if being considered from an international business perspective generally, or a contemporary international trade perspective specifically, it certainly means something very different.
Whereas, FREE Trade’ is taken to mean ‘trade within and between countries that is free from government intervention’;
FAIR Trade, on the other hand, is ‘a trading partnership, based on dialogue, transparency and respect between countries, that seeks greater equity in international trade’ based on the proven failures of free trade.
Essentially, these are the arguments of the trade liberalisation (free trade) versus protectionism (fair trade) agendas. But somehow I suspect the Nassau Institute is already clear on this dichotomy ..:):)
P.S. But for the ‘electricity’ building in London as the start of the XXX Olympiad approaches, I would answer more fully, but I hope this suffices for the time being ….
A slight correction about what free trade really is all about.. Simply put, free trade is the unrestricted exchange of goods between countries without government intervention.. In practice, most governments try to influence trade in various ways, either by subsidizing their own products (such as the EU agricultural policy) or by imposing tariffs and/or trade quotas on imported goods.. The Smoot-Hawley Tariff imposed by the United States during the 1930s comes to mind as a trade policy that help accelerate the Great Depression..
Perhaps the real issues here is international trade within the boundaries of the free market system vs trade that is regulated by government central planners.. Another issue is WTO membership and its endless regulations and rules for enforcement.. We must ask ourselves are there that many advantages for the Bahamas joining WTO?? The new government has stated that WTO is a cornerstone of the government’s economic policy.. Any comments or thoughts you guys??
Hi Tradewinds,
On the surface and on paper, WTO membership is a good thing (or so its advocates would have us believe).
If I were to contemplate the question with regard to The Bahamas (which admittedly, I have not), I would conclude instinctively that WTO membership is not a good thing because the benefits would far outweigh the costs.
You say that the current Government ‘has stated that WTO is a cornerstone of (its) economic policy’. In order to assess fully the question, I would be interested to hear the Government’s rationale for membership. I cannot imagine that the aspiration has been thought through thoroughly, but giving them the benefit of the doubt, I would like to hear why they think WTO membership would be positive sum game. As stated, I am instinctively sceptical.
S3S.. Many thanks for your input on Bahamian membership in WTO..I fully agree with your thoughts almost to the word.. As you will remember most international policy issues here are seldom thought out and little if anything is reported in the daily press.. If you google WHO, there is a sub-heading that discusses Bahamian membership but in reality says nothing.. Like you, I feel we join international agencies believing that there is much prestige in membership only to find that the costs far out weigh the economic benefits.. Again, thanks, your comments and observations are most constructive.. Do continue to keep us posted..