Peanuts and the Post Office INCREASED POSTAL rates are to come into effect soon. And some peanut farmers in St. Elizabeth are storing their harvest, refusing to sell at the price buyers are offering. These two apparently unrelated items of news which The Gleaner carried last Friday are in fact related on one important point: How not to make economic decisions about selling. A major reason for the postal rate hike approved by Cabinet is to prevent job losses among the over 2,000 workers. Everything within reason should be done to preserve jobs. But a document prepared by the Post and Telecommunications Department shows that the Department has processed some six million fewer postal articles for the first four months of this year compared to the same period in 2000. In the age of e-mail, fax, courier services, and wider telephone access, this decline in mail delivery is likely to continue. To hike rates in order to preserve jobs hardly makes economic sense. But then the Cabinet is perhaps better attuned to making political decisions rather than economic decisions. The unions involved have enthusiastically thanked the Government for taking up their proposed 'solution' for applying up to $100 million from increased revenue to maintain current staff levels without passage through the Consolidated Fund. The non-constitutionality of that arrangement aside, the rate hike is likely to make the snail mail postal service even more unattractive. Staff cuts, therefore, have only been postponed, not cancelled. Politics cannot defeat economics. The unwitting workers have been handed a six for a nine. Meanwhile, peanut farmers are refusing to clear their crops at market rates because they "will end up losing". Pests and rot in storage will create greater losses. The price of Jamaican peanuts is two to three times higher than the price of imports. Short of erecting protectionist barriers, which is no longer really an option, Jamaican peanuts will have to compete. And the question arises why consumers should pay higher prices so that particular producers will not lose. Ultimately, neither the Postal Service nor the peanut farmers can demand no-loss prices if consumers are free to choose. The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner.
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