Overpricing a staple is not uncommon. Recently, the National Food Authority was accused of importing rice at a 45-percent overprice. Sardines, rice’s default viand, had also risen, although instant noodles soon replaced it among the destitute’s diet. Add enough water and it fends off momentary hunger for a family of five. But even there, 50-gram noodle packs rose from affordable levels to an average of P8.

It is not just supply and demand. Economic governance, expanded value-added tax, even politics tend to increase prices beyond intrinsic values or purchasing power. Worse, multipliers like electricity and petroleum as business staples bloat input costs and avalanche down the value chain.

Regulations should prevent incendiary political grandstanding simply to correct perceived overpricing anomalies. Sadly, congressional zarzuela and the egos that strut on that stage feed on these.

The market should be the better price regulator. But where the overpricing is in state monopolies, infrastructure or even farm inputs and implements, markets cannot regulate a state that itself spawns an overprice. Overpricing might even be the default given broadband contracts bloated from $125 million to $325 million and ornamental plant fertilizers from P100 to P1,500 a bottle.

Politicians can readily feign seething and boiling over pricing inequities. In a politically charged economy inundated by pricing vagaries, it is not difficult to hitch one’s ambitions to bandwagons and there steer passions toward an electoral office.  

Once ignited, overpricing brews, boils and then burns. Because closure is less an objective than residual rage, politicians often leave issues unresolved and skip to the next. That is both the nature of runaway band-wagons and politicians.

It is also expedient to resort to hypnotic hyperbole and egg the public toward collective ire. That is the bandwagon’s unthinking populism that propels polemic propaganda.

Admittedly, some issues require tempestuous tirades. But there are also issues that are clearly a sham. For instance, analyze the overpricing charges on the proposed procurement for the government’s School Nutrition Program (SNP) for 2009-2010 which one columnist labeled as “the noodle-scam myth.”

Its misconceptions stem from blindsiding on comparable prices. Egged along by mindlessness, several misconceptions were spawned by the comparison between the often-quoted P5.75 pack against the SNP’s proposed P22.

One, our store checks reveal that the average price is higher at P8 per pack. The P5.75 price is not the standard.

Two, the average P8 packs are for the 50- to 55-gram packages. The proposed SNP noodles are in 100-gram packages.

Three, commercial packs are not fortified with eggs and malunggay as those proposed by the Nutrition Research Institute and the Department of Science and Technology. Because the SNP packs remain conceptual, no private-laboratory comparisons on nutritive values are available.

Four, the SNP packs will be distributed to 376 public-school districts, including 278 in Mindanao where even the bravest jobbers fear to tread. These entail logistics not comparable with those of commercially available packs.

To determine comparable pricing, let us compute utilizing data from the Egg Producers Association and one major food company.

From the P8 pack, to determine baselines, we first shed sequentially a 5-percent trade-profit margin, a value-added tax (VAT) of 12 percent from the resulting amount and a manufacturer’s margin of 35 percent. The result is P4.35 as the comparable cost of goods for a 50-gram pack.

To develop a “no cook” quality, add 15 percent. Now derive the cost for a 100-gram pack by multiplying by two. This totals P10.01 for a 100-gram pack.

Now add P2.48 per pack representing a 66-percent egg content, assuming each egg costs P3.75. Add malunggay at P3 per pack and inner wrappers and vitamins at P0.20 each.

Now add back the 35-percent margin and re-apply the 12-percent VAT. This totals P24.02.

Add 19 percent for freight direct to the school district’s doorstep. When summed, the comparable cost is P28.58 per pack, or 29.93 percent higher than the SNP’s proposed P22.00. price. For good measure, compute using P5.75. At P22, the SNP packs are still cheaper.

Using both benchmark prices, ceteris paribus, there is no overprice. Should those who prematurely boil egg and leave issues unresolved remove one foot from their mouths, then maybe they can use all 20 fingers and toes to count and realize their mistake.