Sasha wrote:The only way price controls will work is if the government buys these commodities from the farmer at the market price and sell to the manufacturers at a subsidised cost. Say maize for example, if the market price for a bag maize is Kshs 1,000/-, the government can buy the maize at that price from the farmer and sell it to the millers at say Kshs 600/- or at the price the miller will be able to continue milling profitably. The miller can then be enforced to sell at a regulated price. Same thing for sugar! Problem here comes where mukiha was talking about how this will be enforced.
The idea of buying at a high price and selling at a low one was tried before and it failed in the face of corruption and opportunism. Firs by Simeon Nyachae in the 1990s and recently by Bill Ruto.
In the 90s, GoK was buying grain at 600 and selling at 400. Traders saw the loophole and they bought and sold back to NCPB making a cool 200bob per bag! And you didn't any connections to do that! Those with connections to the high and mighty simply moved delivery notes and purchase orders without moving any grain.
What we need is MARKET REGULATION; not PRICE CONTROL.
The two are totally different.
Regulation of grain market can be done by NCPB; buying to stabilise the farmers prices when they go too low and selling to millers when prices go too high. The same thing that CBK does with forex. But for that to work, we need to inject money into NCPB for it to build up proper reserves.
Similar regulation can be done in petroleum by NOCK. But a look at their prices will tell you that Total, KK etc are not way off the mark.
Still; the question remains: who will determine what the fair prices are?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.