No need to probe garlic suppliers
MEDDLING: COULD LEAD TO PRICE CONTROLS BY GOVT
‘There should rather be a focus on access to water, schools, better health services.’
After the National Consumer Commission (NCC) announced with big fanfare that it would investigate seven major suppliers of garlic and ginger, economists are questioning the sensibility of this course of action.
Garlic and ginger are not staple foods, and there are questions about whether government should get involved in food price increases at all.
The NCC said last Monday the investigation into allegations of price gouging followed an outcry by consumers about excessive prices of these products.
Price gouging is defined as an unfair or unreasonable price increase that does not correspond to the increase in the cost of providing goods or services.
Professor Jannie Rossouw from the Wits Business School says price investigations are not a good thing, because it could lead to price control, which is bad because you cannot fix the supply and demand problem with price control. “This is clearly a case of the underlying market forces of supply and demand. The question is where do you stop once you start controlling prices.”
Professor Johan Willemse from Agrimark Consulting said it was regrettable that government is meddling in price control. “When prices are high, farmers are encouraged to grow these products, but they will not be interested if there is meddling by government.”
Lumkile Mondi, senior lecturer at the school of economics and business science at Wits said we should rather worry about staples during a pandemic. He agrees that government should look at controlling the prices of staples.
“When price increases are investigated, it should focus on the harm it can cause to vulnerable members of the public. Now they are investigating something that bothers people who already have access to staples.”
Mondi said government should focus on hunger and joblessness and not waste resources on investigating the prices of ginger and garlic. “There should rather be a focus on access to water, schools and better health services.”
Garlic and ginger are not on the list of foodstuffs contained in the Consumer and Customer Protection and National Disaster Management Regulations and Directions, published by the minister of trade, industry.