{"id":1662,"date":"2008-05-19T15:17:26","date_gmt":"2008-05-19T07:17:26","guid":{"rendered":"http:\/\/maddruid.com\/?p=1662"},"modified":"2009-03-01T13:02:47","modified_gmt":"2009-03-01T05:02:47","slug":"1657-of-price-ceiling-does-not-encourage-greater-yield-unless-production-is-subsidized","status":"publish","type":"post","link":"https:\/\/maddruid.com\/?p=1662","title":{"rendered":"[1657] Of price ceiling does not encourage greater yield, unless production is subsidized"},"content":{"rendered":"

I praised Shahrir Samad earlier<\/a> but I am having a second thought now. Shortly after that announcement, he suggested for food production to be subsidized, much to my dismay.[1]<\/sup><\/a><\/a> Pragmatic may be but our current government policies are confusing. If there is a liberalization in our economy, the current trend does not seem to suggest that.<\/p>\n

Take for example the recent effort to increase in local rice yield.<\/p>\n

KUCHING: Sarawak will develop large-scale padi planting areas and mini-estates to achieve 100% self-sufficiency in rice by 2015.<\/p>\n

Deputy Chief Minister Tan Sri Dr George Chan said the state government had identified eight areas totalling 43,821ha as suitable for large-scale padi production, with Sungai Seblak in Roban the first to be developed under the 9th Malaysia Plan. [Going big on padi yield<\/em><\/a>. The Star. May 8 2008]<\/p><\/blockquote>\n

And then contrast that with call for price ceiling on rice.<\/p>\n

JOHOR BARU: The Domestic Trade and Consumer Affairs Ministry wants ceiling prices on local varieties of rice to be imposed immediately to curb fluctuating prices.<\/p>\n

Ceiling prices for the local 5, 10 and 15 per cent broken rice are supposed to come into effect on June 1, but retailers are taking advantage of the interim period to raise the prices of these varieties. [Shahrir: Impose rice ceiling price right away<\/em><\/a>. New Straits Times. May 19 2008]<\/p><\/blockquote>\n

Price ceiling removes the incentive to increase production in a free market. Nevertheless, there is at least one way to increase yield despite the presence of price ceiling and that links back to subsidizing rice producers.<\/p>\n

The size of the subsidy is inversely related to prices of rice under this scenario. The larger the subsidy, the lower will the prices be. We all better pray that the differential between the ceiling and market prices is small.<\/p>\n

And dare not to even think that you will be enjoying lower spending under this scenario. Just think who is actually footing the bill for that subsidy. Yes, you and I. We are giving out our government with money to allow us to buy cheaper good. If that is unclear, we are paying the government to allow us to buy cheaper food.<\/p>\n

How stupid is that?<\/p>\n

We might as well not pay tax and pay for higher rice prices. A far simpler situation, do you not think so?<\/p>\n

\"Mohd \"Mohd \"Mohd<\/p>\n

[1]<\/sup><\/a> <\/a> \u2014 KUALA LUMPUR, Malaysia (AP) — Malaysia’s government is planning to subsidize locally-grown rice to prevent consumers from being hit by record high prices of the staple food in the world, a Cabinet minister said Monday. [Malaysia plans local rice subsidy<\/a><\/em>. CNN. April 28 2008]<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

I praised Shahrir Samad earlier but I am having a second thought now. Shortly after that announcement, he suggested for food production to be subsidized, much to my dismay.[1] Pragmatic may be but our current government policies are confusing. If there is a liberalization in our economy, the current trend does not seem to suggest […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[242],"class_list":["post-1662","post","type-post","status-publish","format-standard","hentry","category-economics","tag-price-control"],"_links":{"self":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1662"}],"version-history":[{"count":2,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1662\/revisions"}],"predecessor-version":[{"id":2672,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1662\/revisions\/2672"}],"wp:attachment":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}