Over the past couple decades successive agriculture ministers have either imposed or threatened bans on food imports as a way of supporting Bahamian farmers.
The unintended consequences of such actions were higher prices for what consumers believe are inferior products.
The Banana market of 1996 is a prime example of unintended consequences – for both producers and consumers.
In a short period of time after government imposed a ban preventing imports to “help” the local banana growers, the foreign bananas were available from roadside vendors at higher prices.
Consumers still preferred the large yellow imports to the variety offered by local growers.
In 2006 a threat to ban imported eggs was not implemented.
Today food stores sell locally produced eggs as well as the more expensive imports.
The current minister of agriculture has threatened to impose a “ban on chicken imports” unless Bahamian wholesalers buy 30 percent of their chicken purchases locally.
As noted, there was no shortage of imported bananas during the ban in 1996 even at the higher prices.
It is highly likely that foreign chickens will find their way into Bahamian households.
In spite of a ban on imported chickens and bananas consumers seem to prefer the imports. It was suggested the imported chicken is less expensive so that’s why people buy it.
Yet, in the case of eggs, the imported product was more expensive and the consumer still purchased them.
Price is a factor but not the only one when people decide how to spend their money.
For the bureaucrats at the Ministry of Agriculture, their time would be better spent determining why Bahamians prefer the imported chicken, why wholesalers buy it, and encouraging Bahamian farmers to promote their products.
Even if a government minister thinks he knows best, being elected to public office is not a mandate to use force to prevent or promote market action so long as it is peaceful.
Local farmers risk their own money to supply the markets. The successful ones find their niche and consumers buy their products. Instead of banning imports it is better to educate Bahamian consumers about the benefits of buying home grown products. Encourage high standards along with creative marketing like taste tests, and prove their product meets strict standards for safety.
It is unclear how the minister of agriculture can force a business to purchase a government specified percentage of its chicken inventory from the vendors he chooses.
What happens if the chickens chosen by the minister do not sell? Does the minister intend reimbursing the merchants for their loss?
Forcing businesses to make bad investments harkens back to the politburo of Soviet Russia.
Hopefully reason will prevail and the minister will use his soapbox to encourage people to buy local chicken instead of the threatening forceful tactics described in the proposed policy.
As the Nassau Institute pointed out in 2006, protection for some producers discriminates against others.
It encourages other businesses to seek government assistance or worse, involvement in their particular enterprise.
There is a long history of costly failures when government interferes in markets.
Sadly such failures never deter the newly elected from repeating the errors of their foregoers. It’s all about politics.
By: The Nassau Institute