Given that there is free trade between the states, could a potato grower by-pass the system by selling his spuds to a person or company from another state, who could then on-sell them within WA? And what if I drive a truckload of spuds across the border into WA? And what if you deliver your spuds around in a convoy of vehicles, each with a 49 kg box on board? This could become a sitcom.

On the lobster front, they need to be controlled to prevent over-fishing, but I don't think spuds have been on the endangered list since the Irish potato famine.

Candide

I agree, there is a much stronger case for regulating lobsters than potatoes. Lobsters are a scarce natural resource, potatoes are not.

Licenced WA growers must sell to Potato Marketing Corporation. According to the Act:

A person shall not sell or deliver ware potatoes, otherwise than —
(a) to —
(i) the Corporation; or
(ii) an agent authorised to act on behalf of the Corporation;
or
(b) in accordance with a permit granted, or exemption notified, under section 25.

http://www.austlii.edu.au/cgi-bin/download.cgi/au/legis/wa/consol_act/mopa1946232

There is nothing to prevent growers in other states from “exporting” product to WA, and it happens sometimes when WA supplies are low and prices are especially high. But potatoes are a low-value bulk commodity and transport costs make it a relatively expensive option to cart them across the Nullarbor.

Rhian

I objected to David’s Leyonhjelm’s premise that the sort of regulation present in the potato industry in WA is socialistic and hence inherently evil, regardless of whether the consumer is actually losing out or whether there is a net negative outcome compared to other states.

However, if you can assert that there isn’t a better overall outcome or that there are significant negative factors in the way it operates, then I’m with you.

In other words, I have no problem with a tight regulatory regime. But of course, it has to produce a better outcome, otherwise there’s no point, or the methodology needs to be changed to make it produce such an outcome.

Regarding your example, it is hard to comment other than to say that the expenditure was not really just related to one farmer; it demonstrated that the regulatory body was determined to police the rules and that all other producers had better operate within those rules or else they risk pretty serious consequences. Yes it sounds over-the-top, but I’d need a better understanding of the situation to be able to confirm or dismiss that.

As I said in my last post; tight regulation is needed. Otherwise the whole thing is at risk of falling in a heap and becoming a free-for-all, or at least the law-abiding participants risk being disadvantaged compared to more aggressive less law-abiding producers.

Ludwig

Actually, the expenditure was related to one farmer – Tony Galati, who has a long history of publicly challenging WA’s potato marketing regulations. In my opinion, the surveillance was a disgraceful and disproportionate waste of public money intended to intimidate a vocal critic of regulation. It irritated me so much at the time I still remember it clearly.

I’m not against regulation when there is a good reason – like Candide, I agree that lobster production should be regulated, for example. Economics outlines a fairly straightforward set of circumstances where “market failures” can occur that result in inefficient or socially damaging outcomes. These often mean that government intervention is warranted, including regulation.

But … where there is no good reason, the most efficient and socially beneficial outcomes usually come from leaving production and demand to the market. And, as the author makes clear, the cost of regulation is not only economic. It involves state coercion, surveillance and penalties, and makes certain activities illegal which are not by anyone’s standards immoral (growing and selling potatoes is an offence?).

There is a broader principle at stake here, as well as just economic efficiency. I think the State should stay out of people’s lives unless there are good and serious reasons to intervene. Telling people which vegetables they can and cannot grow does not count, in my book.

<< Actually, the expenditure was related to one farmer >>

Yes Rhian, but in effect it was related to all growers, by way of the regulatory authority demonstrating that it is willing to go to considerable lengths to make sure the system is tightly regulated.

This is really important. All too often we see poor regulation, which makes a mockery of the relevant regime.

In this instance, the action taken appears to be over the top, but if we fully understood the whole story, it may not seem so out of place.

I am particular concerned about regulation because time and time again I have experienced the results of ineffective policing. All too often, what we are told applies in law and what really applies are two quite different things. I detest this sort of duplicity, which is present all around us.

Two ways in which it has seriously affected me are road rules – speed limits, tailgating and general obnoxious driving practices. What the law says and what the police actually police are two quite different things, and hence what the general community considers acceptable practice is significantly different from the actual law.

The other one is the code of conduct in my former workplace, the Queensland public service, which proved to not be worth the paper it was written on. The code of conduct is supposed to be all employees’ law book. They are supposed to be obligated to operate according to its rules. Yeah right!!

I’m also particularly opposed to just leaving things up to market forces.

contnued

Rhian, you wrote:

<< There is a broader principle at stake here, as well as just economic efficiency. I think the State should stay out of people’s lives unless there are good and serious reasons to intervene. >>

Agreed. But there is nearly always the need for some regulation. There is very little that we can do that is completely independent of some rule or regulation. And fair enough too.

We need strive for the minimum regulatory imposition that we can get away with, while maximising its benefit and minimising the negative effects. While there might be a net positive effect, it usually doesn’t come without creating disadvantages for some people. So it is all a really difficult juggling act, which can all too easily get infected with bureaucratic overload and inefficiencies, or as I say on the other side of the coin; suffer from inefficient regulation and hence poor performance in the very purpose that it was up for.

As far as WA potatoes go. It would appear that there are certainly inefficiencies, but that the overall program is not really all that bad. Whether it is needed at all, given that other states operate quite differently, is uncertain, although David’s assertion that the growers are in no hurry to get rid of it despite its apparently overly cumbersome requirements would suggest that does have a net positive effect.