Irena Beqiraj
The sudden increase in the price of fruits and vegetables by almost 50% requires a detailed analysis that should focus on the collectors. From the data but also from the fact that the government is very sensitive about agricultural products sold on the sidewalks, it seems that the fruit and vegetable collectors function like the maple syrup federation in Quebec, Canada, a province that produces more than 70 percent of the world's maple syrup.
The Quebec Maple Syrup Federation is a cartel as greedy as OPEC. By decision of the Canadian government, all small producers must sell their production to the Federation.
Every spring, the province's 7,400 producers send their produce to the federation. Regardless of whether production is abundant or scarce, the federation controls the quantities it puts on the market to maintain high prices.
When the federation suspects that farmers are producing and selling outside the system, it, with the help of the government, imposes fines and seizes the production. The same thing happens in Albania. The farmer, lacking the capacity to sell the products himself, delivers the products to 2 or 3 collectors who function as a cartel.
They buy tomatoes from farmers at a price of 60 lek/kg, (often with lek in hand) and sell them for 350 lek. Any rebellious farmer who takes to the streets to sell his products as the only opportunity to profit from his sweat, in the name of food security, is crushed by the government.
Moreover, as a reminder of the debate taking place today, experience in the fruit and vegetable market shows that taxation does not stabilize the structure of markets, much less reduce prices. In 2014, the government used taxation techniques as a way to secure markets for local farmers with the aim of increasing market competition and reducing prices, by allowing farmers to sell their products to collectors at the full price including VAT but without forcing them to be included in the VAT scheme.
The government allowed collectors to self-invoice products purchased from farmers, reducing the fiscal burden on them in order to lower the final price. But the concentration of the market to only a limited number of collectors, despite the government's fiscal facilitation, helped create and strengthen the "federation" of fruit and vegetable collectors, who became the exclusive beneficiaries of self-invoiced VAT, leaving the farmers that this taxation scheme was theoretically intended to help empty-handed.
Working in government taught me the difference between good and bad economists. What distinguishes a bad economist from a good one is that a bad economist can only see what is visible, while a good economist sees the yet unseen consequences that will follow the visible effect of an action.
The good economist weighs the merits of a proposal, a policy, or an institution by considering both the effects that he and others can see, as well as the future consequences that he foresees but others do not.
Editorial
