Colombia Announces Kirchner-Style Price Controls on Food
The Colombian government has signed an agreement with five major food warehouses in the country to impose price controls that freeze the price of red meat, fish, dairy, eggs, grains, and processed foods, with the exception of fruits and vegetables, until January 15, 2017, measures similar to those implemented in Argentina by Cristina Kirchner’s government.
The measure was reported by Agriculture Minister Aurelio Iragorri, who said that despite the fact that some of the major food producers did not agree with the measure, the nation’s largest were persuaded to participate, including: Corabastos (Bogotá), Cavasa (Calí) in the western state of Valle del Cauca, the Bucaramanga Supply Center in the northeast of Colombia, Granabastos (Barranquilla) on the Caribbean coast, and Surabastos (Neiva) in the south.
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The measure was taken, according to the minister, to achieve food security for Colombians this year and into early 2017 following price swings that has occurred in recent months with some vegetables due to the entry of new crops and agriculture projects like “Colombia Siembra” (Colombia Sowing).
The agreement stipulates that the merchants can fix a price for the products in question, and then must subsequently publish them in the various points of sale so that the buyers are well informed of prices. However, this could present problems for merchants and traders.
In the eventuality that production costs go up and prices are set, merchants and grocers will see their profits reduced and the measure will harm their bottom line. Similarly, in the case of production costs going down, consumers will still be stuck paying higher prices stipulated by the agreement.
Minister Irragori said, in an interview with Blu Radio, that price controls are not mandatory and therefore we are not talking about the introduction of “food cartels” which fix prices. However, the government and the nation’s largest food producers and distributors have already established such an arrangement, albeit for now temporarily.
Source: Blu Radio