Prices not falling fast enough

Farmer/vendor at the New Roseau Market

Dominicans can now breathe a sigh of relief. Seven months after the passage of Hurricane Dean and near total ruin of agriculture, the sector (and particularly the non-banana sector) is beginning to bounce back. Life is slowly returning to the farms and marketplaces. Food shortages (except in the case of a few exotics), once feared could lead to widespread starvation and massive inflation are disappearing. So acute was the problem, food prices immediately skyrocketed. And as expected, the high prices persisted throughout the post Dean period. At EC$20.00 a bunch of green bananas and EC$0.75 per ripe finger, 'fig' truly became 'green gold.'

Fresh food exporters also suffered terribly. DEXIA could not capitalize on the demand for container-loads of dasheen from its US buyers. Farmers demanded as much as EC$2.00 per lb for the crop while the US market offered EC$0.60. Others fared no better, unable either to secure supplies or outbid consumers scrambling for rapidly thinning supplies.

Government's swift and decisive action however may have averted a major food crisis. Though heavily criticized, its massive cash injections, inputs, and income support to the farmers and vendors is now paying big dividends. Equally important as well to the recovery is the resilience of our farmers. They were willing, with or without government's assistance, to rehabilitate their farms and rebuild their lives. Back then we were willing to pay an arm and a leg for the not-so-presentable limited supplies.

It was a pleasure then when I visited the New Roseau Market a few Saturdays ago to witness the recovery firsthand. However it has not been a wholesale return to business as usual. Food is back but prices are no where close to their pre-Dean levels. Green bananas still sell at EC$17.00 a bunch, common oranges three for EC$2.00 and carrots EC$6.00 a pound. While Dominicans wait on farmers to drop their prices, they are showing no such inclination. In fact, if anything, the farmers say they have a case for increasing prices further; cost of living has increased and farm input prices have risen sharply.

However and notwithstanding recent surges in the cost of living, food prizes are still way too high. Not too long ago, the former Trade Minister, the Hon. Charles Savarin chided farmers for their failure to readjust food prices. He insisted that in light of the massive government subsidies doled out to farmers, the present high prices cannot be reasonably justified.EC$20 million dollars invested in agriculture is quite a hefty sum. One would think that kind of support would more than adequately compensate for any increases in production cost.

Even if we conceded a legitimate cost increase, farmers still could not justify these price hikes. As a part-time farmer, I know the biggest cost component of any farm operation is labour. That cost has not budged in years. Nor has the movement in other farm inputs posted triple digit increases. However food prices have posted between 100 % to 500% increases.

Farmers of course are business savvy. They understand perfectly the laws of supply and demand. We dare not fault them for taking advantage of our free market economy. After all, we've drilled them for years to adopt a more business like approach to farming. They’ve finally caught on.

Some are suggesting that these high prices are not going to go away and so consumers had better get used to it. Others are predicting prices will come down as the recovery gathers momentum and comes full circle. For now however, prices are not falling fast enough. Let’s just hope that it does not take another thirty years for prices to return to their pre-Dean levels.