The cost of low prices

Available for over a year

When food prices rise steeply, should governments act to protect their consumers? In Kenya, the parliament has passed a bill which would bring in price controls on staple foodstuffs and fuel, though it still needs approval from President Moi Kibaki. But do these measures really work? The BBC's Kevin Mwachiro reports from Nairobi. He hears from consumers who welcome the idea of price controls and economists who reject it as a distortion of the economy. And Lesley Curwen talks to Dr G.S.C. Rao, who is the chief executive of the Simbhaoli Sugar Mill in India. He argues that price controls on sugar mean his production costs now outstrip the price he can get for the sugar. Plus we hear an analysis of the pros and cons of price controls, from Jonathan Brooks, an economist at the Organisation for Economic Co-operation and Development.