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Political economy of chicken imports

Published: Sunday | December 21, 2008



Martin Henry, Contributor

To import, or not to import? The humble chicken, which is not just now crossing the road but crossing national borders as a basic food item, is providing an important lesson in political economy.

Minister of Agriculture Dr Christopher Tufton, originally an academic man in management studies, has been both praised and vilified for the decision to import chicken quarters for Christmas. A classic case of damned if you do, and damned if you don't.

The line-up of vilifiers and praisers is generally as expected. Local chicken producers and idealists for eating what we grow and growing what we eat are naturally against the importation of chicken. Chicken importers and many consumers are naturally in favour of importation. And the Government is in the middle. What is the proper role of the Government?

Twofold objective

Way back in 1776, as he conducted his enquiry into the wealth of nations, Adam Smith that super-famous Scottish political economist, saw political economy as a "branch of the science of a statesman or legislator" concerned with the twofold objective of "providing a plentiful revenue or subsistence for the people ... and (supplying) the state or commonwealth with a revenue sufficient for the public service. It proposes to enrich both the people and the sovereign" (The Wealth of Nations, 1776).

Smith made a trenchant observation about the behaviour of producers. "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." He went on to say, "It is impossible indeed to prevent such meetings, by any law which could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary."

On the other hand, consumers "have commonly neither inclination nor fitness to enter into combinations: and the clamour and sophistry of merchants and manufacturers easily persuade them that the private interest of part, and of a subordinate part of society, is the general interest of the whole."

The desire for the highest possible prices and for control of the market is natural to producers, individually or in cartels. The natural desire of consumers is for the lowest possible prices and for choice in the market. Someone has to arbitrate between these contending desires. Traditionally, producers, armed with capital, and often better education, have been better organised and with greater access to the corridors of power and to media than consumers. One of the most important functions of government in political economy, the interrelationships between political and economic processes, certainly in a market economy, is to block the formation of monopolies and cartels and to allow, as free as possible, trade.

Restriction

But all nations want to protect their domestic industries and producers and every single one has some kind of restriction upon completely free transborder trade in order to do so. But all nations also want to protect their domestic consumers. But that has to mean facilitating the lowest possible prices for the widest variety of goods and services. So as Michael Chuck, the grateful president of the Cargo Importers Association, put it in his published praise letter for the decision of Government to import chicken meat for Christmas The Gleaner, December 17, someone needs "to think of the whole and not segments of society." Now that has to be the Government. The rest of us all have our sectoral, partisan interests which may not be the same as the general public interest as we would like to think.

The Constitution is replete with statements about things to be done or not done in the public interest. Even fundamental rights and freedoms can be restricted, suspended, and denied in 'the public interest'. It is very important, then, that we have as clear as possible a sense of what the 'public interest' is. Unfortunately, the Constitution itself is not very helpful as the term is left undefined - and perhaps is indefinable in strict legal terms. A bit of maths may be helpful. The public interest has to at least be the lowest common denominator, those few common and universal things, necessary for the well-being of the state and of its citizens.

A critical element of the common denominator must be food. Everyone has to eat. Right to life, liberty, and security of the person are nonsense rights without food access. This is not to say the state is obliged to feed people. It means that the state must facilitate general and fair access to food, as far as possible.

We have been labouring under the delusion in some quarters that we can have food security from domestic production. But as I pointed out in an earlier column, only a few nations are net exporters of food and Jamaica has never been food self-sufficient since the Tainos, a low-population, Stone-Age culture.

Nourished by food imports

Jamaica is nourished by food imports. A really big and unenviable question that the Government has to wrestle with, then, is at what point is the restriction of food imports to protect domestic production a dereliction of duty to protect the 'public interest' for access to affordable food, especially for the poorest and most vulnerable?

A big part of the chicken import controversy is the battle over data. Surely we can have reliable independent data on local food production, consumer demand and food importation. The poultry industry self-interestedly says it can supply; the Government says projected consumer demand in the Christmas season exceeds local capacity. And importer Chuck says the broiler companies are uncompetitive in the international trade despite the 40 per cent duty paid on imported poultry, down from 260 per cent. One very significant reading of the import duty, certainly at the original 260 per cent, is that consumers have been forced by their Government to subsidise the uncompetitiveness of the local industry. The rational question, therefore, arises: What has been the public-interest trade-off benefit to consumers?

And while we are thinking about that, the platform for government decision-making on issues of this sort has to be bigger than mathematical data. It has to extend to a philosophy of political economy, which answers the question, 'What is the role of the Government?'.

In any case, this column is obliged to applaud the minister of agriculture and the Government for taking a chicken import decision which, on the face of it, is in the interest of the hard-pressed consumer and not a bowing to the usual pressure of the organised and powerful producers' lobby, which, as Adam Smith observed more than two centuries ago, disproportionately determines public policy and what is the public interest.

Martin Henry is a communications consultant. Feedback may be sent to medhen@gmail.com.

 
 


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