Even NPR knows food price controls lead to shortages and other problems

It’s bad enough that Kamala Harris cast the tie-breaking votes for the inflation-causing federal spending explosion of the last four years, but today she announced a plan to impose price controls on food.

Price controls have been tried for a few thousand years and they never work. And even NPR knows price controls cause food shortages and human suffering.

Here’s the key excerpt from their 2019 report titled, “Why Are Venezuelans Starving?“

ZUNIGA: Guillermo is referring to Hugo Chavez, Venezuelan late president. There were several agricultural policies that Chavez put in place. The first policy was price controls. That started in 2003.

GARCIA: Yeah. And price controls are exactly what they sound like. The government forces companies to sell their products below a certain price. The price is controlled. It is capped.

So in this case, back in 2003, the Hugo Chavez government started capping the price of food. Supermarkets could not charge people more than a certain amount for the food that they bought from them. It started with basic foods, like sugar and milk. And the goal was to make food cheaper for Venezuelans. But there is a reason that price controls are considered bad economics.

ZUNIGA: Here is why. The supermarkets still had to buy the food from the farming companies. And if the supermarkets cannot sell the food for more money than they buy it, then the supermarkets don’t have an incentive to buy as much food to put on their shelves, right? So the result is that less food starts showing up in the supermarkets.

GARCIA: And so, as Guillermo explains, the government then just extended the price controls to the farming companies themselves. The government forced the farmers to sell their food for below the market value to the supermarkets.

ARCAY: It started with the price of the final good. But afterwards, they started implementing price caps on all of the supply chain.

GARCIA: So the farmers now could not sell their food to the supermarkets for the market value. So they, the farmers, did not have an incentive to make as much food. And they stopped investing in the equipment and fertilizer and other things needed to make the food. And they did, indeed, start making less food.

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