Minister pledges 'no retreat' over breadbasket reforms

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Minister of Health has pledged to stand firm on the proposed 'breadbasket' food reforms, ruling out a similar retreat to that made a year ago over "sugary sweet drinks".

Dr Duane Sands, minister of health, told Tribune Business that the Government backed away from policies designed to steer Bahamians away from such products after "a blistering assault" from their producers.

Promising that the Government was unlikely to "capitulate" over its 'breadbasket' reforms, which will remove 'staples' such as corn beef and sugar from the price-controlled items in a bid to encourage healthier eating, Dr Sands said discussions with the private sector had also given him a "different perspective" on such restrictions.

The Minister did not commit to eliminating price controls, which many in the retail/wholesale community have called for, but indicated he was more alive to their distortionary impact and the disincentive for merchants to stock products upon which they made a loss. Disclosing that there had been intensive, wide-ranging consultation with retailers and wholesalers over the proposed 'breadbasket' reforms, Dr Sands said: "Let's just say we've had a spirited discussion that ultimately led to a meeting of the minds, and I believe we benefited tremendously from a constructive process with them. "I believe they [the private sector] understand this is not a hostile takeover of their industry. We are genuinely interested in partnership, working together in the public interest while being mindful of the potential impact.

"I was very impressed with the depth of understanding from a nutritional point of view from the players in that industry. It's easy to imagine someone has one eye, three eyes until you sit down to talk with them, and we came to terms on shared and mutual goals."

Dr Sands said the Government was unlikely to be deterred this time from reforms that are intended to benefit the quality of Bahamians' lives and health, while also boosting workforce productivity and reducing the drag on the economy and healthcare system caused by the prevalence of chronic non-communicable diseases (NCDs).

"Last year we took a stab on sugary sweet drinks, and we backed off because of a blistering assault by the producers," he told Tribune Business. "I don't think we're going to be singularly minded to capitulate this time.

"This time we have a year with the industry, a year with the producers, under our belt and I think we're going to stand firm on this matter, particularly with sugar, high fructose corn syrup and other things creating these really bad problems." Dr Sands described sugar as "the most dangerous drug in the Bahamas" in terms of the number of deaths it caused.

The Minister conceded that the private sector had also made "a reasonable case" for the elimination or easing of price controls, which "has to be considered in the way forward on what is the most effective way to achieve the ends we are trying to get to".

Many in the business community view price controls as an obsolete, unnecessary regulatory restriction that fails in its objective to protect low income Bahamians by giving them purchasing power. By forcing merchants to sell a significant portion of their inventory at a loss, they also raise the cost of non-price controlled items, while discouraging retailers from stocking them.

"While we don't agree on all points, we had regular dialogue, sat down, exchanged a ton of e-mails and so forth, and I am pleased to say their contribution has given me a different perspective on what I thought was a pretty simple issue," Dr Sands revealed of his talks with the private sector on 'breadbasket' reforms and price controls.

"Things you think are simple, it's not simple, particularly since we're in a world economy that has market forces independent of what's happening in the Bahamas."

Dr Sands acknowledged that price control meant "coming up with a price point below the cost of providing the product that eliminates the incentive to even stock or carry the product".

"It proves a real challenge to the bigger picture of economic growth," he added. "Being mindful that you can cost shift, but only to a limited degree, any decision we make has to consider the planned results and unintended consequences.

"That discussion was very helpful, and caused us to step back, look at it critically, listen to the criticism. I'm sure that as the public weighs in they will add further clarity to this. Hopefully, when we're done with this process, it will pass the sniff test and actually be beneficial."

Dion Foulkes, minister of labour, who is working with Dr Sands on the 'breadbasket' food reforms, told Tribune Business he had received no representations from the private sector - especially retailers and wholesalers - to eliminate or amend price controls and their mark-ups.

Backing them as a a tool to protect lower income Bahamians, Mr Foulkes said: "We live in a free market economy, and wanted to get the private sector to buy in to what we're doing, and so far we've got a very positive response.

"It's [price controls] really something that was put in place to help assist and protect persons in the very low income bracket, where they can purchase food and feed their families. I think it's something good."