THE Fair Trading Commission (FTC) says it is concerned about the proposal to give the Jamaica Dairy Development Board (JDDB) the authority to establish farm gate prices for local milk.

The commission said that exercising such control over the farm gate price of milk would be contrary to the objectives and provisions of the Fair Competition Act (FCA).

"Specifically, such control amounts to price-fixing and would be in contravention of Section 34 of the FCA. More importantly, it would compromise the competitive environment in the market for milk," the commission said.

The commission was responding to a report in the Observer on Wednesday, which stated that both Nestle Jamaica Limited and the Jamaica Livestock Association (JLA) had raised concerns about the proposal to authorise the Board to establish farm gate prices for dairy milk, under the Jamaica Dairy Development Board Act. The Act is currently being reviewed by a Joint Select Committee of Parliament chaired by Minister of Agriculture Roger Clarke.

Clarke, himself, had raised some concern about the wording of that section of the bill which states that, in performing its functions, which include formulating appropriate policies for the dairy sector and monitoring the growth of the sector, the board may "establish farm gate prices for milk". He suggested that it may have to be re-worded.

But, Jamaica Agricultural Society president Senator Norman Grant insisted that the Board needed to be empowered to regulate farm gate prices in order to protect the local dairy farmers.

But in its statement yesterday, the FTC said that while the JAS might feel the need for the board to be empowered to regulate the farm gate prices, the greater social good is achieved by competitive markets.

"Competitive markets encourage economic efficiency, lower prices and higher quality," the FTC said.

The JLA, in its submission to the committee, said the proposal would contradict government's liberalisation policy.
Nestle Jamaica's general manager James Rawle, in his submission to the House committee, said that allowing the Board power to establish farm gate prices, "sounds like price control at the farm gate".

Rawle added that it was common knowledge that Jamaica has one of the highest farm gate prices for milk in the world, and suggested that this was rooted in inappropriate feeding and husbandry practices, which he said pushed up prices beyond the reach of the average consumer and making it a niche market.

He was supported by Opposition spokesman on foreign trade, Karl Samuda.

"You have no dairy industry. What was a thriving industry, with potential to grow and develop and compete internationally, has been reduced to a niche industry," Samuda said.

But, Clarke said that while he accepted that local milk production has been reduced from 38 million litres per annum to in the region of 16 to 18 million litres per annum, the committee had to find a way to lift production.

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