Getting Rid of the Middleman

There had been an economic discussion earlier touching on what was wrong in Ethiopia that quickly run out breath and it did not manage to put its finger on a probable culprit that is surfacing lately. According to the diaspora who had a firsthand encounter with the problem in the country, the never letting up shortage of necessities could be created by the wholesalers and retailers that are not only charging exorbitant price, it seems that they could also be hoarding the essential food products in order to create artificial shortage that will enable them to jack up the price. This kind of scenario is not new and what we can read from it is, at least the farmers are doing their best to provide the country with what it needs and although what they harvest is not enough, at least it could halve the shortage.

In a situation like this there will be an ample opportunity for the government or other organized bodies such as the various Kebeles to thwart the money making drive of the middlemen. It is also possible for farmers to have their own open market on weekends where people from the city could go and buy directly from them. It is possible if those who are in a position really want to make a difference. The government also could always put a chilling on the price the middlemen could charge by making it illegal to make profit beyond a certain amount or percentage.

The means to beat the merchants and arrest the greed they could be gripped with that is driving them to milk the situation are plenty and can be implemented effectively. There could be many measures to deter what they are doing which is becoming very similar to what the absentee landlords were doing and might require a similar measure because it is not only illegal, but it is also inhuman. These merchants and wholesalers are Ethiopians and if they are not working hard to alleviate the problem the country is grappling with, they could even lose forever their lichens to trade, because what they are doing could be affecting many people.
Some solutions could be if we talk about farmers bringing their produce to a certain location, Kebeles and others could arrange the transportation of people and the product they are buying. What it takes will be two kind of transportation system for those who do not have their own transportation. Buses that will travel people that will go to wherever the markets are located whenever and wherever there are such open markets and lorries or trucks that will bring back what these people will buy that could easily be marked and supported with a receipt, to a distribution center in the city where the owners can pick it.

Or the Kebeles could take charge and become the middlemen as much as possible, procure the essentials from the farmers directly, and sell them to their members, as some of them are already doing.. If push comes to shove there is no reason why the government cannot intervene because it would change the dreary situation that is in existence in the city, where those who had seen the situation are witnessing that there is a shortage of almost everything. The reason that this is happening is because someone with money is buying them and hoarding them to jack up the price would even make the situation worse. The news report that the PM is threatening to seize and sell coffee stocks might not be an extreme measure, although the reason behind it might be to alleviate the shortage of foreign currency the system could be strapped with. Such measures might be needed to avail the badly needed necessities.

Such practice would make the change resistant nation’s situation precarious because the government had always been afraid of taking chances and what the middlemen are doing currently could justify its fear. In reality, what takes place is sacrificing the interest of one group in order to protect the interest of another group. Such fear could be grounded in the fact that the government knows what people such as the middlemen are capable of doing, because their individual interest could easily evolve and can become a group’s interest similar to what the retailers and the wholesalers are doing. They are fully aware of the outcome of what they are doing when they are creating an artificial shortage in order to profit from it. What this demostrates is it is difficult to blame the change resistant government even if its resistant could be causing damage. The reason for that is if it introduces a drastic change there will always be a powerful group that will manipulate and exploit the situation to the point where some other group will be put in harms way.

The retailers who could originally be from the cities that they are serving such as Addis Ababa are out to exploit their own member citizens. If this kind of individuals or groups are given more opportunities, such as having a say in the country’s agriculture, where they can buy and sell land or farms, while at the same time making the farms produce what the public needs, it is difficult to imagine what kind problem they would create. Unless there is a government law that would require them that they cannot leave a land fallow, as long they feed themselves and their family they could cease farming in order to sell whatever little is produced at a high price. In a situation like this governments can come up with as many laws as possible to protect the interest of the buying public and it is only those who meet the stringent requirements who will be issued license.

Whenever there is monopoly, demand and supply does not work because both could be manipulated. If merchants are allowed to hoard essential items because they are free to do so in a democracy they can always charge any price and the public either has to pay that price or has no other choice other than going without what it needs. This seems to be the situation in the country. Everyone including the government knows what is taking place, but it would mean that the government has willingly tied its own hands if it is not doing anything about it. Governments can dismantle anything that looks like a monopoly or refuse to issue lichens if any action or commercial activity is going to result in any kind of monopoly. In times of emergency the prohibition could last for a long time and as long as merchants make enough profit after covering their cost, there should be a law that should prevent them from manipulating a dreary situation in a given country.

It does not matter where it is, when it comes to making more profit. Unless there is some kind of law, or preferably competition that would put a check on what everyone is doing, most business people would not mind manipulating the market if the government does not intervene. The only exception for that might be if the markets are developed are there are a big number of players that will compete to satisfy the existing demand and that will avail advantage for the buying public because there could be excess supply that cannot be easily manipulated.

The merchants in Ethiopia have defied that because there is shortage of supply and the only way the consuming public would get what it needs might be when it is charged a fair price that will be introduced by morally responsible merchants and if that is not the case it is the job of the government to intervene and avail what the public needs at a fair price, even introducing subsidy is possible if the need warranties it. That seems to be another area the government in office is falling behind in carrying out its duty effectively and if the problem continues to persist, it might show that it might be beyond the governments ability to solve the problem, which will create ammunition for opposition parties when election comes. But since the nation is not yet lucky in that area too, it would be another unfortunate episode the nation would have to suffer from.