San José, Costa Rica, since 1956

Food Crisis Punishes Poor Households

MANAGUA – At the throng of shop stands crammed into Granada’s sprawling labyrinth of a marketplace, vendors and shoppers comment on food prices as if there were no other topic worth discussing.

“Everything is super expensive. Each week the price of rice and cooking oil goes up,” says longtime vendor Rosario Quintana, who has been selling in the market since she was 8.

“Life is difficult here; people don’t earn enough on their salaries to meet the cost of living, even when both parents are working.”

With petroleum prices at an all-time high, accumulated inflation already at 5% after the first quarter of 2008, and the possibility of recession in the United States, the economic prospects are looking increasingly grim for most Nicaraguan households, after a year in which food prices increased by an average of 50%.

According to official estimates, the majority of poor families now spend 75% or more of their family income just to keep food on the table. So each time food prices go up, so too does the level of collective desperation.

President Daniel Ortega blames the current food crisis on the “tyranny of global capitalism,” and has identified the issue of food security as the “No. 1 theme on the national agenda, if not the agenda of the region and the world.”

Ortega says the neoliberal economic model has reduced food availability by both discouraging the production of basic crops in Latin America and converting precious corn harvests into biofuels.

“We have an explosive situation,” the president said, noting the recent food protests in the Philippines, Haiti,Mexico and Honduras.

A regional summit on food security held here last weekend has set the stage for new cooperation to increase food harvests and defuse an outright social explosion over food prices, according to sources at Nicaragua’s Ministry of Agriculture.

On the national level, the Sandinista government, which campaigned on a promise of “zero hunger,” has taken some important steps to counter the rising cost of beans, a Nicaraguan staple that nearly tripled in price last year to $1.10 a pound. The Ortega government responded to the dramatic inflation by reactivating the old state-run food bank, ENABAS, and converting the state into a major buyer of beans to help stabilize market prices.

To its credit, the government has managed to drive down the price of beans to 63 cents per pound, despite some concerns that the government’s “fair price” programs have mostly targeted Sandinista neighborhoods.

Opportunity from Crisis

Ortega has stressed that the global food crisis presents an enormous opportunity for Nicaragua to convert itself into the breadbasket for all of Central America, as well as the greater “ALBA” alliance with Venezuela, Cuba and Bolivia.

On April 23, during an emergency ALBA summit in Venezuela, Ortega signed a document with the other leftist countries to ensure food security among the four member nations. The document pledges the ALBA countries to developing “comprehensive agro-industrial development programs for cereals, mainly rice and corn, legumes and beans, oilseeds, meat, milk and water for irrigation.”

It also calls for the creation of a $100 million fund to execute that program. During a follow-up food-security summit held here last weekend among ALBA countries and other governments from Central America and the Caribbean, the participating members laid out a series of agreements to increase food production in Nicaragua, Honduras, Guatemala, Cuba and the Dominican Republic through funding of up to $600 million, though it’s not clear yet where that money would come from or how the financing would work.

Additionally, Nicaragua is looking at creating new incentives for agricultural producers from El Salvador to invest in farming production in Nicaragua, according to Lester Juárez, press spokesman for the Ministry of Agriculture and Forestry (MAGFOR).

It’s all part of Ortega’s plans to convert Nicaragua into a major supplier of basic food items to all of Central America and the greater region.

“Our great challenge, our great battle is to produce food in Nicaragua,” Ortega said during a recent rally in Masaya. “We have to fill Nicaragua with food, even in our yards at home, we have to plant a little bit of beans and corn. This will mean income, and will assure us food, because beans and corn are worth a lot of money. And it will allow us to export to international markets, to the rich countries that have money to pay for these products.”

Ortega stressed that Nicaragua is positioned to become a great regional provider.

“We have the advantage of being a country with a campesino population, which is around 50% small- and medium-sized producers and cooperatives that have a culture of production in the agricultural industry, in basic foods, in livestock and dairy production,” Ortega said.

The only thing missing, the president said, is financing.

Stuck in Politics

For Cirilo Otero, head of the Center for Research on Environmental Policy, Ortega’s talk of turning Nicaragua into regional food supplier is a case of the president “promising others something he hasn’t been able to do at home.”

Otero agrees with Ortega that Nicaragua “has the best conditions in Central America” to become a regional breadbasket, thanks to rich volcanic soils, an agricultural tradition and some 443,000 hectares of unused farm land that could be put back to work. But, Otero says, despite the president’s talk about the importance of production, the government doesn’t seem to have a plan to make it happen.

Revitalizing the countryside, Otero said, requires major investment in secondary roads and agricultural credit, as well as new production technology and education to teach farmers the importance of growing beans, corn and other basic food products that aren’t as lucrative to harvest.

Coordinating all that requires a plan, which Otero says the government has failed to articulate.

Instead, the analyst said, much of Ortega’s talk about increasing agricultural production in the countryside seems to have more to do with ideology than reality. For example, Ortega recently spoke of producing enough food to sell to all of Central American and Venezuela at a “just price,” while at the same time producing even more food to sell to the rest of the world at higher “market prices.” That discrepancy, Ortega said, would help the rest of the world “understand that we have to end the free-market system and establish a fair market, which is the only way to save humanity.”

Otero says Ortega is talking politics, not production.

“What we see is a political discourse, but the issue of food security is very serious and requires lots of investment,” Otero stressed. “The problem is that the current economy is focusing investment on the export and textile sectors, while forgetting the agricultural capacity and productive traditions of Nicaragua.”

What’s the Plan, Boss?

The government insists it has a plan to increase food production in the countryside, but the details of how that plan will be executed remain unclear.

MAGFOR Minister Ariel Bucardo has said Nicaragua will increase planting on productive soils by 14% this year, and says the government has $50 million to help small producers with seed supplies.

The Nica Times tried to find out more about the government’s plans for the planting season, which starts with the rains in the coming weeks, but Bucardo did not return numerous requests for comment this week.

On the ministry’s Web site, information about the Rural Production Plan hasn’t been updated since 2005 – two years before Ortega took office and threw most of the previous administration’s plans out the window.

As for the women in the market, all they know is that prices continue to climb, despite political promises that things will get better.

Elma Pasquez, who sells jocote fruit in the market for 9 cents per dozen, says the situation in Nicaragua is one of daily survival.

“What I sell is cheap and what I buy is expensive,” she said. “On an average day, I make 100 cordobas ($5.25), enough to buy food for the day.”

“We are day to day, that’s how we live,” she said, drawing nods of agreement from the other women in the stands next to her.


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