Development & Aid, Economy & Trade, Food and Agriculture, Headlines, Latin America & the Caribbean

COLOMBIA: Food Prices Rise after Record Rains

Helda Martínez

BOGOTA, Jan 26 2011 (IPS) - Food prices are set to rise in Colombia, due to the combined effects of soaring international prices and local crop losses after nine months of devastating rains. The government expects food prices to rise three percent in February, while independent analysts forecast an increase twice as high.

“The global crisis is affecting us much more than the crop flooding, because the country imports 100 percent of the barley, lentils, peas and chickpeas it consumes, 95 percent of its wheat, 90 percent of soybeans and sorghum, and 75 percent of its maize, as well as other foods,” economist Aurelio Suárez of the non-governmental organisations Unidad Cafetera and Salvación Agropecuaria told IPS.

Suárez said some 300,000 hectares out of Colombia’s five million hectares of cultivated land were flooded during the last rainy season, which lasted from April to December 2010. But the Agriculture Ministry reported that 800,000 hectares were flooded, and that soil recovery will be slow.

Food price “inflation is due to importing high-priced foods,” said Suárez, “but the government and agribusiness associations want to manipulate the facts and blame the lack of food security and sovereignty policies on the rains.”

He was referring to the policies associated with the so-called Green Revolution, which introduced methods and technologies favoured by transnational companies into agricultural production in the mid-20th century. Added to this, according to critics of the system, the free-market economics of the 1990s replaced much local food production with vast plantations producing ingredients for biofuels.

“In Colombia, production of basic foods is declining, while oil palm, sugarcane and forestry plantations are continuously expanding,” Suárez said.

Between 2002 and 2009, during the administration of rightwing former president Álvaro Uribe, Colombia’s food imports increased from six million to 10 million tonnes a year.

During the same period there was a series of scandals involving the misuse of funds intended for helping small farmers. Instead, they went into grants and loans to large landowners, through the Agro Ingreso Seguro (stable farm income) programme managed by then Agriculture Minister Andrés Felipe Arias.

One of Arias’ loudest critics over the corruption scandal was Juan Camilo Restrepo, who became agriculture minister in August 2010.

Restrepo, who vowed to rescue the rural areas of Colombia from a decades-long crisis, was appointed minister during what experts say was the worst rainy season in 50 years.

According to official statistics, the heavy rains and subsequent flooding, particularly in the north of the country, left 310 people dead, 62 missing and 300 injured, 5,600 housing units destroyed and 1,300 hectares under water. The government expects to spend seven billion dollars on the recovery effort.

Against the backdrop of these disaster statistics, additional imports of 40,000 tonnes of rice were announced, to be purchased from February onwards. Minister Restrepo stressed that supplies have not run out for any food product, but he did not rule out the possibility of further rice imports.

However, rice-growers in the departments (provinces) of Tolima, Huila, Meta, Casanare and Guaviare in the centre and southeast of the country are protesting against the rice imports. “Before March, they will mobilise en masse to demand the suspension of these totally unnecessary rice imports,” Suárez said.

“Three out of four plates of rice eaten in Colombia are supplied by these provinces,” he said, adding that the situation of dairy and coffee producers is “very bad indeed.”

Based on the apparently politically-influenced food import policy, Suárez reckoned that 75 percent of the food price hike is due to the impact of the global economic crisis.

He attributes the remaining 25 percent to the floods and to transport difficulties because of damaged roads.

“The global food crisis is due, among other things, to the shortfall of Russia’s wheat harvest and difficulties in Australia and other countries, bringing about the highest food prices in the last 50 years, according to the FAO (Food and Agriculture Organisation of the United Nations),” said Suárez.

Middlemen also have a role to play.

“Agricultural supply varies and depends on harvest yield and location, whereas demand is constant and spread throughout the country. A third agent is needed to overcome these contradictions: intermediaries who will stockpile, accumulate, store and transform food and determine prices,” he said. They increase the supply at times of greatest consumption, he added.

Saulo Martínez, a trader in the central Paloquemao fresh food market in Bogotá, told IPS: “Prices rise when demand increases, for instance in December. In January they fell, but we expect them to increase in February.”