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Why is it necessary to extend the decentralization of price approval?

Why is it necessary to extend the decentralization of price approval?
Photo: Jose M. Correa

The decentralization of the approval of prices is a gradual and necessary process that makes economic management more flexible, a process in which financial economic analyzes are carried out that should lead to the determination of prices based on covering costs and expenses and applying a reasonable profit, he assured. , in an article published on the website of the Ministry of Finance and Prices (MFP), the Master of Science Silvio David Gutiérrez Pérez, director of Agroindustry of this entity.

The decentralization to the companies of the approval of the prices, he argued, is extended with the objective of achieving autonomy and allowing more flexibility and approach to the economic fact, which has been carried out gradually.

Meanwhile, he continued, expanding the decentralization of the approval of retail prices is, in addition, a measure in development and generates greater responsibility of the entities that apply this power, based on using efficiency indicators in the determination of prices.

He pointed out that, in this same sense, similar decisions have been adopted with the prices of MSMEs, self-employed workers, agricultural products and with companies that work in similar conditions to these entities.

“These measures, gradually, are showing their results, for example, in the stability of the prices of some agricultural products and their decrease in times of high yields, such as tomatoes, onions, beans and some root vegetables, although they are still prices that will require further reduction as production grows and stabilizes,” he stressed.

The also assistant professor at the University of Havana showed that these results are opposed to periods with capped prices, which discouraged the producer, as they were unable to market due to their real costs. As a consequence of this, he said, the abandonment of the harvests, the shortage of products in the market and, in parallel, underground markets with highly speculative prices that are present today due to the lack of other goods.

Contrary to the measure of capping prices, in the recent Resolution 81/22 of the MFP, the products listed in Annex 7 of Resolution 346/20 of the agency itself are decentralized. Except for the nomenclature of products that are provided in legal norm 81/22, they are centralized for the determination of their prices: edible oils, chicken in different formats, minced poultry and beef, and production hygiene and cleaning products. national, being products of first necessity, protected in their prices in favor of the population.

As a matter of principle, the director of the mfp clarified, in the measures that have been adopted for the decentralization of prices, it is provided or required that, in the exercise of that power, the comprehensive evaluation of costs and expenses must be taken into account with criteria of rationality and efficiency, which is also recognized by Resolution 81 of 2022 of the MFP.

“The power to decentralize implies responsibility and, therefore, not allowing free market economies to be generated in our socialist society to obtain lucrative profits. Functional and institutional control structures in the business system and government authorities at the corresponding levels and towards all economic actors, as well as popular control, play a fundamental role in this, “said the researcher.

Likewise, he recalled that the solution to contribute to the reduction of prices, as has been recognized so many times, also goes through the growth of national productions and the amplification of greater and better services to the population.

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