The proposed tariffs and ban on foreign egg imports are unlikely to aid Bahamian producers because their retail prices are already lower than their overseas rivals, an economic think-tank has argued.
The Nassau Institute said that a survey conducted at a Bahamian grocery store showed that while the price of a carton of eggs from Rainbow Farms, in large and extra large sizes, stood at $1.50 per dozen and $1.55 per dozen respectively, their foreign competitor’ products were priced at $3.09 for a large carton and $5.99 for extra large.
The Nassau Institute said: “It is obvious that price is not why people buy the foreign eggs, when locally produced eggs are roughly half the price.
“Based on this information, increased tariffs are not likely to make people shift from buying the eggs they prefer… they would still not buy the eggs the Ministry of Agriculture wants them to. Consumers make decisions to suit their personal needs and desires, not those of government, which
explains why government planning usually fails to meet the stated intentions.
“Then the power of government will be applied even further, and imported eggs will be banned. And as with previous bans on agricultural products, the imported eggs will find their way into the country through ‘illegitimate’ businesses where they will be stored in less than ideal circumstances, creating a possible health problem.”
The Nassau Institute added that the proposed ban was likely to encourage other businesses to press the Government to impose protectionist measures to protect them from foreign competition, further harming consumer choice.
It said: “If the Ministry of Agriculture is allowed to enforce this policy, more businessmen can then seek protection from competitive imports. But just as it would be unconstructive to prevent Bahamians from buying and importing what they wish of other products – like food, clothes, furniture, appliances, cars – the egg industry should not be exempted from competition.” The Nassau Institute said tariffs were effectively another form of income tax, but it praised the Bahamian egg production industry for its work to date.
It added: “The effort of local egg producers should be applauded. They have taken personal risk to develop their businesses. Not all people are born with this entrepreneurial spirit, but the answer to their sales decline is not to use the power of the government to force Bahamians to buy their product.
“It might take a little more effort, but the local producers need to educate consumers about their product and the benefits of buying from them. They should also consider surveying potential customers in the local grocery stores to see why they do not buy the homegrown product. They might find that something as simple as packaging has an impact on their sales.
“It is interesting that bureaucrats believe they know best what eggs everyone should buy, but to allow any government minister the power to apply tariffs or import bans at the stroke of a pen is dangerous, no matter how well intentioned.”
