Price band for all foodstuffs in the Venezuelan market

[Bacchus39]

http://www.eluniversal.com/2011/07/29/price-band-for-all-foodstuffs-in-the-venezuelan-market.shtml

Speculation is the evil and all that is the fault of the private sector. That was the message stubbornly repeated by Minister of Food Carlos Osorio in a meeting between government authorities and agribusiness representatives.

-------------
In the case of food, Osorio reported that all items, even unregulated products or delicacies, will bear a price band. "We will assess each one of those items; each one of those structures, and the Vice-President said: an upper margin, a lower margin, and all those items should be within a price band."

For his part, Pablo Baraybar, the president of the Venezuelan Chamber of the Food Industry (Cavidea), said in leaving the meeting with the government authorities, that in some sectors, industries are producing at a loss due to the policy of price control so far implemented.

"We cannot wait for companies to go into bankruptcy in order to make adjustments," the director regretted. In his opinion, the appropriate way towards stable prices in the market is by means of enlarging production, instead of a policy of price control.

[naaman fletcher]

1. How do they know what the price of something should be?

As always, price controls will lead to HIGHER not lower prices as people stop producing because the government makes producing unprofitable.

[Bacchus39]

2. they believe the purpose of business is to provide products at low cost to people

rather than make a profit.

I assume they will take a look at current costs of items and then set the range accordingly.


the price of chicken was set 38% higher today. I assume to encourage more production. Price controls won't work because of inflation and they can't set price controls on imports either unless they subsidize them which I assume they do.

[joshcryer]

4. Short of changing the Venezuelan constitution to ban private property, this is the only way...

...to reduce all wages and all prices to a fixed price ala Cuba. It's a really bad way of going about it though. It's remarkable beyond comprehension.

As far as subsidizing the cost of imports, remember, in Venezuela gasoline is cheaper than water, it's a very very very bad thing to do.

[joshcryer]

3. An interesting way to bring back feudalism!