There is a passionate debate on the Price of Rice between businessman (agriculture) turned Politician Benoni Urey, announced Candidate for President of Liberia on one hand, political rivals and related critics on the other (FPA, October 6, 2016).
Politician Urey argues that “the increase in the price of rice (Liberia’s staple) . . . was due to huge profits importers intended to gain” or “are making millions in profits by selling at high price to our people. If elected president, I will reduce the price”. But he did and does not say what is the lower or “right price” of rice to which his reduction would be made, how and what would he do to achieve this reduced or right price. His critics and rivals, also, offered no suggestions. This, is where Economic Thought comes into play.
According to Economic Theory,the price of any commodity traded on the free market is determined by the market forces of supply and demand; rice is a commodity traded on the free market.The more and more such a commodity is demanded (wanted or desired) by consumers, the higher and higher the price of that commodity rises, and vise-versa, or the less and less the commodity is demanded (not wanted, not desired or available quantity in excess) by the consumers, the lower and lower the price falls.
The “right price”, according to this Law of Economics, is at the point of intersection of demand and supply schedules; that is, where the Demand (in the quantity) is equal to the Supply (price in dollars per unit of the quantity) on the demand/supply schedules or curves.
Now, in the Liberian context in which rice is our staple food item, we should and must act by and through the application of the Art of Management to manipulate and control both quantity and price at desirable levels and, in so doing, reduce the price, also, to reasonable, affordable and desirable levels, the “right price”.
This approach requires the development of productive capability such as national transport/communications, education and training, location and organization of production entities in agriculture, industrial development, etc., throughout the nation to enable production (supply) of rice and other staples equal to local quantity (demand) for consumption and excess quantities for the export trade.