The three typhoons that recently hit Taiwan in quick succession sent food prices soaring to stubbornly high levels, but government efforts to determine if prices are being manipulated and track possible gougers have proven ineffective.
Premier Lin Chuan (林全) wants to track down people suspected of manipulating food prices, and prosecutors and police nationwide have been scrambling to inspect food markets and supermarkets for signs that prices are being artificially inflated and find those responsible.
Typhoons interrupt normal supply and demand. Fluctuating food prices are a given. Should unscrupulous resellers conspire to artificially inflate prices, the sky is the limit.
There is no easy solution. Food distribution is complex, and certainly more complicated than office-bound authorities can reasonably be expected to unravel. The government can send police to markets to keep an eye on prices, but how exactly are they supposed to do that?
If police officers do not know the typical prices of vegetables, they will certainly understand the ins and outs of supply and demand, or whether the prices being asked are reasonable, or indeed whether there has been illegal price manipulation.
Lin’s policy has turned out to be a lot of noise with little to show for it, except to force profiteers into hiding until the storm blows over. The failure to actually nab any profiteers has set the government up for ridicule.
To muddy the waters further, few things in Taiwan are untainted by politics. No sooner had the policy of going after suspected manipulators been announced than there was media speculation that it was all about bringing down former Yunlin County commissioner Chang Jung-wei (張榮味), a Chinese Nationalist Party (KMT) member who is chairman of Taipei Agricultural Products Marketing Corp, the nation’s largest agricultural products distributor.
Political conspiracy theories such as this are of little help in stabilizing food prices. While the corporation controls the vegetable and fruit situation in Taipei, it does not have major influence in the nation as a whole. The idea that the government would topple Chang to stabilize food prices is far-fetched.
However, if the Taipei City Government cannot deploy farming experts to sort the situation out and the central government sends its own personnel, then this will give rise to such conspiracy theories.
It is undeniable that the distribution process is not entirely above board. Fair Trade Commission Chairman Wu Shiow-ming (吳秀明) has conceded that collusion between auctioneers and market manipulators cannot be ruled out.
The idea of unscrupulous elements working to manipulate food prices is not new, but we have seen precious little evidence that the government is actually looking into monopolization of the market.
Lin’s policy is just a repeat of former premier Hau Pei-tsun’s (郝柏村) efforts 20 years ago. It certainly would not be favored by any economist worth their salt.
This is more about political show. The government should work to release supplies held in cold storage onto the market, or increase food imports so that prices can stabilize and the gap between demand and supply can be brought to a more manageable size. This would reduce the profit margins of the wholesalers and discourage their disruptive behavior.
The government’s approach is extending the fluctuation in food prices. It is little wonder that some people have accused it of incompetence. This farce should be brought to an end; the government has to stabilize the supply, make it easier for farmers to replant their crops, remove obstacles to distribution, and turn its attention to solving the root causes of the annual problem.
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