Editorial | Grain Import Tariffs Too High?
•
by Swagger McSwag
Don't you think 60% import taxes on grain are a little too high?
Just asking, because I was originally aiming for a smaller figure.
What we want is to regulate the price of grain. If we set import taxes too high, the price of imported grain may shoot up too much causing domestic manufacturers to take advantage of the situation and raise their prices. Then, we'd find ourselves in the other ditch of overpriced grain.
What we want is balance.
Does 60% work towards achieving this balance? What do you think?
____________________
RELATED ARTICLES
-Bad economic environment
-A Quick Note on Grain Taxes
____________________
VOTE AND SUBSCRIBE to The eRepublik Outsider
"Straight News from Inside Sources, Out-of-the-box Commentary"
____________________
May 9, 2009
Facebook
Twitter
Discord
Comments
But we have DoHA Grain which will always sell low, keeping the other prices low in order to compete.
@Hazzn: but based on the current market offers, DoHA Grain sells q2 grain.
My question is, shouldn't there be a viable q1 grain market as well? I do not run a company, but i imagine you'd need q1 grain when starting a food company?
and based on the current market, the q1 sector got hit the most with the present tax conditions. i think a 25%-30% import tax would be fair for everyone because it gives: a tax advantage for the local growers; a fighting chance for the importers; and steady supply and fair prices for the food companies.
but then again, i'm not an economist and i'm basing my suggestion only on what is being offered in the market currently.
@Nikko - 2 Units of Q1 Grain = 1 Unit of Q2 grain. Companies just go for the cheapest, if Q1 is selling for 0.5PHP and Q2 is selling for 0.90PHP you buy the Q2.
ok...thanks Bestie!
at present, q1 grain is 0.7 PHP (2 local companies) while DoHA's q2 is 1.8 PHP. so it makes better sense to buy 2 q1 than 1 q2...which argues that we should still maintain a viable q1 grain market.
i am all for protecting our local growers, but not at the expense of supply & efficiency. we should protect our grain industry only if they could amply supply the local food companies, plus a buffer of probably a week (to give time to lawmakers in case we want to lure foreign companies back again).
@Nikko. When are you coming back to the Philippines? You should run for Congress. XD
@Ariel: hehe, i am coming back soon. just saving up a bit more, so i could put up a company there. 🙂
The price of food has been on a steady decline since the FPM took over the Philippines. If the grain prices has risen, it is because the SGV rose taxes to ridiculous levels meaning that our companies lost a certain amount of money. They need to recoup that before all systems return to normal. Flooding the market with cheap foreign grain is counter productive. The locals will not remake their money, and eventually go out of business. Then with no competition, foreign companies will then be free to charge what they want.
@Nikko_33
Actually DoHA's q2 grain was there by accident. It was there so I could transfer some grain over to DoHA's q1 food company. But I forgot to take it down.
From the market, we do have a steady flow of q1 grain, we have 7 q1 grain company selling grain. We only have 2 selling at .7 PHP in order to just sell it (I assume), while the rest is still at the average cost of around 1 PHP. I think we have enough supply...
-Director of Home Affiars
There are good price competition on 5 Q1 and 2 Q2 local grain companies now. Looking at their stocks, they can afford to supply the food companies.
Let us say FoodCompany_A(Q1) hired Employee_1 with the following Profile:
Wellness: 46.05
Manufacturing Skill: 1.25
Daily Food Productivity: 3.6
Daily Salary: 1.75 php
Since Employee_1 produce 3.6 of food a day, he will use 3.6 of grain material as well.
So each grain costs .70. The total expense for grain will be:
.70 PHP x 3.6 units = 2.52 PHP
If FoodCompany_A sells each food 1.86 php(currently in the market), he can gain the following:
3.6 units of food * 1.86 = 6.696 php
less expense: 2.52 php for grain and 1.75 php salary
Total profit: 6.696 - (2.52 + 1.75) = 2.426
If the food company will sell as low of 1.25 php each food, they can still gain profit:
3.6 units of food * 1.50 = 5.4 php
less expense: 2.52 php for grain and 1.75 php salary
Total profit: 5.4 - (2.52 + 1.75) = 1.13
With this last scenario, the citizen can survive because his salary is more than the price of his food.
Question: Are grain companies overpricing?
Scenario:
Employee_1 working in a Grain Company with the profile:
Wellness: 50 (average)
Manufacturing Skill: 1
Daily Food Productivity: 2.7
Daily Salary: 1 php
Price per grain with no profit: 0.37
Current Market offer: 0.7
Total Profit per grain: 0.33
Answer: you will be the judge 🙂
Based on the numbers, I think its good to lower the Income Tax on grain workers and lower VAT for food companies. The Food will be cheaper, the workers gets more salary and people can eat more!
So you want to cut all major income to our treasury just after our treasury has been emptied? No tax = No hospital. Simple as that.
As for grain selling a little bit more; as stated before, they have just suffered from a massive tax increase thanks to our friendly neighbourhood Spaniards. Though the tax has been righted, they will be out of pocket. Putting them even more out of pocket will only cause grain prices to increase, or for them to go out of business completely. They need to be able to recoup their losses, and then business as usual.
And I think someone already pointed out, food prices haven't actually increased. They have gone from approx 7PHP to just over 1PHP and now stopped decreasing.
As already pointed out, anyone who works 2 days will have an increase of skill and thus an increase of wages. 6 days and you reach level 2 which wage packet is usually around 3.50PHP for a Q1 company. That is plenty to pay for food and have enough left over for saving. There is not an issue here. The inly complaint I have seen in regards to the tax issue, is from a foreign company who is annoyed he can't take advantage of our crashed economy any more.
yeah I know all about those eSpaniards, that is why I proposed to make the import tax on grain to 60%.
Isn't we need to focus more on people starving here for now, as I see more people begging for food, than concentrating on buying the hospital? There can be a possibility that you can get that hospital from somebody else for free which I think you know what I mean. Besides, lowering at least the VAT for food a bit doesn't hurt a lot.
btw, do we really need the Hospital now? Thanks!
The VAT in question is only at 5%! And the only person I have seen complaining, is a guy who owns a company abroad who is annoyed he can no longer make a quick buck out of our crashed economy.
When you think about it, the only people who will be earning 1PHP are those with skill level 0. A citizen only stays at skill level 0 for 2 days. They also get a 5PHP hand out from the government, which means they should be able to afford food until their skill increases. Once that happens, their wage will increase and they will then be able afford food easily on their wages alone.
If someone is older than that and still on 1PHP wage, then they are working for a crap GM and should consider moving to a new workplace.
@Keitarour: thanks for the info!
As long as the supply is stable and the prices are acceptable to the manufacturers (so they can still turn a profit & thus provide jobs), then i think the current tax rate is ok.
Ours is a young economy, and it needs all the protection & support it can get to give it space to grow.
I heard my name?
Screw the grain industry. I'll go cotton picking somewhere else.
@Bestie: I'm sure you all know this already, but 1 Q2 food isn't really equal to 2 Q1. Remember, you can only eat one food per day (you can't forcefeed your character). So it's not a simple matter of buying 2 Q1 food every day to substitute for 1 Q2 food, because your character would still only eat one food every day.
If you worked and trained every day, eating Q1 food every day would lead to a slow decrease in wellness, until your wellness gets low enough for Q1 food to match the daily wellness decrease (if ever).
@ Memento Mori
Besties comment is in reference to grain. With grain 1xQ2 = 2xQ1.
What HazzN said ^