By Alan Bojanic
According to the United Nations’ Food and Agriculture Organization (FAO) Food Price Index, the cost of food in May 2011 increased by 37 percent from the same month last year. A change in international food prices does not always automatically affect countries. Whether it does depends on many factors, including a country’s capacity to produce food locally to satisfy internal demand and whether or not a social safety net is in place.
In general, Central American countries confront a complex situation because they are net importers of food. Since 1990, the quantity of food purchased from abroad and the cost of food imports are increasing significantly throughout the isthmus. This can easily translate to a growth in food inflation, which primarily affects the poorest families in the region, who spend up to 70 percent of their incomes on food.
There’s no single solution to this situation, which according to FAO is projected to continue through at least 2012. Faced with budget restrictions, some Central American countries are discussing measures to stimulate local food production, and at the same time generate quality employment and strengthen social safety nets.
These measures can and should be strengthened by a response at the regional level. The efforts to integrate domestic policies could be useful to other Central American countries. Because of the size and characteristics of domestic markets, policies extended throughout the region could result in important benefits for all involved.
To understand more clearly, one needs only to examine the region’s food-supply behavior. For example, Nicaragua exports more than 75 percent of the beef and cheese consumed in Central America; Costa Rica exports 70 percent of dairy products excluding cheese; and Guatemala exports nearly 60 percent of vegetables consumed throughout the isthmus.
Said another way, the way one Central American country behaves has a potential impact on the other countries in the region. That’s why the isthmus would benefit from regional policies created to complement actions that countries already take within their borders.
Sharing experiences and identifying collaborative possibilities from a Central American perspective are the objectives of a multi-sectorial dialogue between FAO, the Economic Commission for Latin America and the Caribbean, the Inter-American Institute for Cooperation on Agriculture and the Regional Technical Assistance Agency (RUTA), and they are the reasons for last week’s regional conference on food price stability held El Salvador, with the participation of Guatemala’s vice president, six ministers, six vice ministers and Central American lawmakers. From this dialogue, it is hoped that countries can identify concrete ways to confront together the challenge caused by food price increases and volatility.
Alan Bojanic is representative for Latin America and the Caribbean at the United Nations’ Food and Agriculture Organization.
