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The case for government -run supermarkets

Jan 18, 2022 Letters

Dear Editor,

Kaieteur News – I would like to make reference to an article in KN dated 17th January, 2022 called “Eat shine rice for one week” (https://www.kaieteurnewsonline.com/…/eat-shine-rice…/) which speaks to the unreasonable increase in food prices despite all the relief measures being offered by the PPP. The concern is that there are maligned and self-serving elements within the supply chain of agricultural products in the country that are jacking up the prices. This is concurrent with the unique behaviour of Guyana’s private sector and trades people who only know how to trade up along a supply chain with unreasonable margins throughout the way. For the economic purists who have an unshakeable belief in “free market economics”, I have always maintained, that in Guyana, those rules do not strictly apply, as Guyana, as we all know, is not exactly a normal, textbook environment. And even then, at the core of economic theories, not everything is infallible and there are always different views and models of doing things that can work depending on what the desired outcome to the end user is.
The writer of this KN article also suggests that farmers should be registered and licensed and be allowed to sell their produce directly to the customer within the confines of a ‘farmer’s market’. The intention here, I suppose, is to cut out the middleman. This could be a good idea, especially if a busy farmer can carve time out of their busy schedule to also prepare and market their goods, or if they have someone in their family who can do it for them. This admittedly is where the other value of middlemen reside – they have the time to collect a lot of produce, present it and market in large volumes.
But obviously this is not working as the markups are skewed in a very malignant manner. Especially given all the subsidies and improvements that the agricultural sector would have been receiving throughout the year – the May floods of 2021 have long passed. I would like to stretch the concept of a “farmer’s market” even further, and recommend, yet again, that the Government look into to doing a trial run of grocery stores – no subsidies, no subventions – just like the profitable government-run Asphalt plant and the profitable government-run GuyOil company – open up and compete equally in the free market, except carefully design the supply chain so that the farmers get the direct benefit as much as possible, while only creating margins enough to sustain the operations of the grocery stores and no more. As a government-run institution, once run correctly, the incentives will be different.
For the older ones who have the “jumbie” of Burnham economics still burning their minds I say to you, this is a different era, and my proposal is based on a totally different economic model. Just like you don’t have to present a Freedom House card to buy gas at GuyOil, a government-run chain of grocery stores can serve our entire population equitably. In conclusion, given the steep rise in prices, global and regional inflation, the extreme national importance of agriculture and how impactful food items are to the common man’s wallet, government-run supermarkets/grocery stores at the very least deserve a serious trial run. Put aside the emotions, and let us see what the data from those trial runs say. If it works, the country wins, if it fails due to the revelation of issues at the core of the idea then we shelve the idea and try something else. But to do nothing, would be a grave injustice to the common man.
Regards,
Kimberley Abdul

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