THE price of watermelons, or any commodity, has lots to do with everything in trade, and in international commerce. Changes in prices can send ripple effects around the world.
I'm glad Mr Sefita Hao'uli confirmed that "watermelons are in short supply and commanding a premium . . ." (15 Oct., 2009) in New Zealand, while Tongan growers are dying to send them more.
The "fruit flies" ban on Tongan watermelons must have been lifted, so Mr Hao'uli can rest assured Tongan "unwanted pests" are not going to invade NZ anytime soon. Tongan watermelon growers want to ship more but NZ regulations are limiting their importation.
Isn't there something wrong with this picture? Short supply of watermelons in NZ; high prices at the marketplace; but there is excess supply in Tonga ready to be shipped.
Mr Hao'uli denies there exists at the moment (1) trade barriers, and (2) price control policies regarding Tongan watermelons imports to NZ. Isn't the 200-melon quota a trade barrier? And isn't limiting the supply of watermelons in the marketplace the reason for the high prices (low supply, high demand, high prices)? Regulations force prices to stay high.
This is due to NZ's "protectionist" regulations to guard high prices of low-quality melons grown indoors in NZ, or imported from Australia. If Tonga's better-quality watermelons are allowed to (flood) come in to NZ, the prices of watermelon will definitely drop, and low-quality melons will disappear.
A free-market allows prices to dictate which product customers will prefer, more people will have access to cheaper goods, and more watermelon growers will benefit from competition.
And since Mr Hao'uli is a journalist, he can quickly check why the NZ Government is limiting Tonga to a 200-melon quota a shipment? The job of the media is to ask questions of government when bad economic signs are produced by bad policies. Complaints from farmers should lead us to reexamine trade policies, and expose politicians follies.
For Mr Hao'uli's information, the U.S. economic meltdown was not due to lack of "socialistic" policies. Again, it was government, the U.S. Congress and not the free marketplace, that dictated to mortgage lending institutions to lower the prices (sub-prime rates) on home sales to allow more people to own homes (socialistic policies): realize the "American Dream."
Government created an artificial marketplace with price control: prices of homes were slashed. Banks were making artificial sales as well as poor people and speculators were allowed to own homes they could not afford. Their failure to make the required payments wrecked the entire US economy, and the ripple effects reached all around the world.
