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03-06-2011, 09:02 PM
posted to uk.rec.gardening
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Poor old Farmers ............ again :-(
On Jun 3, 8:16*am, Stewart Robert Hinsley
wrote: In message , Ian B writes Dave Liquorice wrote: On Thu, 2 Jun 2011 23:32:10 +0100, Sacha wrote: It's a question of supermarket chains dictating the prices they pay AND being able to buy YOUR food at cheaper prices from other countries which more heavily subsidise their farmers, pay less to workers or factory farm their animals. Hear, hear. The food market as dominated by the big supermarkets is not a free market. The buyers are dictating the price not the sellers based on cost plus. This why large numbers of diary farmers *are* giving up milk production. That's not how a free market operates; what you're describing is basically something called the "Labour Theory Of Value" which was realised to be wrong in the nineteenth century; the idea that (labour) costs fix prices. They don't. Costs have to adjust to prices, not the other way around, and prices are set by buyers. Think about it at the retail level; maybe a shop would like to sell milk for £2 a pint. But for me, and most conusmers, it isn't worth that to us, so we wouldn't buy it. We force a lower price from the shop. It doesn't matter if it's the only shop in the area (a "monopoly"). It can't make me pay £2 for a pint of milk. The same is true further up the production chain; e.g. as here between producers and retailers. In very crude terms "buyers dictating the price" is precisely how a free market *does* work. Economists understand that, but unfortunately most other people don't. I think there's some dispute as to whether an oligopsony qualifies as a free market. Ian -- Stewart Robert Hinsley- Hide quoted text - - Show quoted text - You have it exactly. |
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