Puerto Rico Economic Pulse ©

January 2008: The Failure of the Visible Hand

An afflicted milk industry in Puerto Rico and possible solutions

The PR milk industry is immersed in a crisis.  Despite government protection, all players – dairy farmers, processors, and even retailers– keep complaining and foretelling the end of milk production in PR The regulatory environment has failed to change the course of an industry that is heading to extinction.  This is the story of the many failures of the visible hand of the Government. The results are well known: fewer cows, less production, zero exports, fewer manufacturing plants, and higher retail prices.  In other words, we have reached the worst possible scenario. We have nothing to win by staying the same course. It is time to try a different route to save the milk industry and redeem the biggest loser in this game: the PR consumer.