Honduras is about to embark on a rice cultivation program that will likely increase short term yields, but holds the potential to devastate the rice industry in Honduras if strict protocols are not observed.
The key to the potential increased yields, and the danger, is a variety called Clearfield rice.
Beneficio de Arroz Progreso, S.A. de C.V. has signed an agreement with BASF, a German company licensed to sell Clearfield rice varieties along with two herbicides necessary for its successful cultivation, Newpath and Clearpath, to begin using Clearfield rice in Honduras.
Clearfield rice has a natural mutation that causes it to be resistant to the herbicide Imidazolinone, known by trade names including Clearpath and Newpath. This rice was developed at the LSU Agriculture Center and developed commercially by Horizon Ag, a rice seed company.
What Clearfield rice is supposed to address is an energetic weed, red rice, that out-competes rice in fields, and lowers the quality (and hence the price) for harvested rice. Red rice (Oryza punctata) is a separate species in the rice family, close enough to domesticated rice (Oryza sativa) that any of the herbicides that kill red rice also kill domesticated rice. Clearfield rice is selected for resistance to specific herbicides that currently can kill red rice.
The rice farmer can use two applications of Imidazolinone-based herbicides to control red rice in the field without harming the Clearfield rice, while eliminating the red rice in the field.
The presence of red rice growing in domestic rice fields degrades the quality of the harvested rice crop. Rice from fields with red rice intermixed must be milled twice, first to remove the husks, then a second time to remove the red rice. This additional milling leads to more broken kernels, and hence a lower grade designation, for the finished product.
But because red rice is a member of the rice family (the genus Oryza), there is a danger of hybridization. When red rice grows in proximity to Clearfield rice, the gene the conveys resistance to the herbicide, which is dominant, passes to up to 0.46% of the offspring.
That's not good, because then the weed has the same resistance as the rice itself.
To avoid this problem a specific, complicated, and expensive protocol was developed by Horizon Ag and BASF. This Clearfield rice production system requires that the grower make two applications of Clearpath and Newpath herbicides during the growing season.
After harvest the farmer must rotate crops to a glycophosphate (think RoundUp) resistant crop, and treat the field with that for another year. Red rice in surrounding irrigation ditches must be treated with Beyond herbicide. The goal is to nearly eradicate red rice in the rice field itself, then let any red rice that survives and goes to seed sprout and be eradicated in the subsequent year, before returning to Clearfield rice again in the field.
The herbicides are toxic to fish and aquatic invertebrates according to the Materials Safety Data Sheet, and don't biodegrade. So water in the field must be contained and not dumped into the local drainages. Likewise, workers must be protected from inhaling, eating, or getting these herbicides on their skin.
No saving seed from this rice, either.
The benefit is that Clearfield varieties yield a higher quality of rice, promising a higher price per pound. But this benefit will only be realized if the full protocol is observed. Hybrid varieties of domestic rice crossed with Clearfield rice also offer increased yields, which would increase income per unit of area planted. However, if resistant red rice develops, there is no herbicide that will kill it without also killing the commercializable rice.
If a resistant red rice escapes from a farm under the Clearfield protocal, rice quality, and hence price, will decline; there will be no treatment to reduce red rice in growing fields that does not also harm the growing rice. Such an event could put an end to the commercial viability of rice production in Honduras.
Showing posts with label economic news. Show all posts
Showing posts with label economic news. Show all posts
Thursday, September 15, 2011
Tuesday, September 13, 2011
Debts of the Coup
Roberto Micheletti Bain contracted more debt with Honduran banks in his seven month takeover of the Honduran government than the previous three administrations did in twelve years.
At least, that's what Julio Raudales, the Vice Minister of Planning, told El Tiempo last Thursday, although the figures he cites are not quite as bad as that. Not quite-- but bad enough.
From the beginning of Carlos Flores Facussé's presidency to the date of the coup, the indebtedness of the Honduran government to Honduran banks went from 5000 million lempiras to 14,000 million lempiras.
But between June 28, 2009 and January 27, 2010, under the de facto regime headed by Micheletti, Honduran government debt rose from 14,000 million lempiras to 21,000 million lempiras.
Raudales added that the actual number may in fact be higher. Bills are still coming in from that period, and must be paid out of the current budget allocations, reducing services now.
This is another cost of the 2009 coup. As we reported at the time, the intransigence of the Micheletti regime in the face of universal international condemnation led him to draw down Honduran financial reserves dramatically.
And that is a debt that the Honduran people will pay.
At least, that's what Julio Raudales, the Vice Minister of Planning, told El Tiempo last Thursday, although the figures he cites are not quite as bad as that. Not quite-- but bad enough.
From the beginning of Carlos Flores Facussé's presidency to the date of the coup, the indebtedness of the Honduran government to Honduran banks went from 5000 million lempiras to 14,000 million lempiras.
But between June 28, 2009 and January 27, 2010, under the de facto regime headed by Micheletti, Honduran government debt rose from 14,000 million lempiras to 21,000 million lempiras.
Raudales added that the actual number may in fact be higher. Bills are still coming in from that period, and must be paid out of the current budget allocations, reducing services now.
This is another cost of the 2009 coup. As we reported at the time, the intransigence of the Micheletti regime in the face of universal international condemnation led him to draw down Honduran financial reserves dramatically.
And that is a debt that the Honduran people will pay.
Monday, September 5, 2011
Honduran Coffee Break
It may be time to buy Honduran coffee. But cautiously.
I myself prefer tea. But when I began doing research in Central America, I learned to drink coffee. Tea bags were imported and very expensive, especially unaffordable the summer I was given $10 a week as a stipend.
Cafe El Indio ads saturated billboards and radio. The coffee that I remember most fondly was prepared on visits to the campo, prepared from whole beans roasted one batch at a time. Back in La Lima, though, coffee came from little brown paper bags with the logo of a Plains Indian in war bonnet printed in red, where the coffee tasted a lot like the bag.
Coffee is big business in Honduras. Costa Rican and Guatemalan coffee may have more brand-visibility, but Honduras actually produces more coffee than Costa Rica, and depending on the source you consult, close to or more than Guatemala. The Honduran government has just announced projections of production for the current season that would make the country the second largest producer of washed arabica beans (the variety that is desirable for fine coffee drinking), remaining only behind Colombia.
Coffee cultivation is ubiquitous in Honduras: a USDA overview this April reports that coffee was being grown in 213 of the 298 Honduran municipios, distributed in 15 of the 18 departments that comprise the country. According to the same source, 30% of the Honduran population was employed in the coffee industry. Domestic consumption has been rising, fueled by urban coffee shops that are in demand for internet access, up 56% from 2008 to 2009. But still, most of the crop (90%) is exported.
Not all of this production comes into world markets labeled as Honduran.
Substantial amounts of Honduran beans used to end up purchased in Guatemala and mixed with Guatemalan beans, since, as a 2010 USDA report put it, "Guatemalan coffee is often sold at a premium in the international market, while Honduran coffee is typically sold at a discount". One year later, that statement had been changed to reflect a new reality; now importers are "more aware of the quality coffee that it is being produced in Honduras which has increased demand within the formal market".
Consequently, one of the reasons Honduras is expected to move into second place as a world coffee producer is "a sharp drop in smuggling Honduran beans to Guatemala" leading the year's projection to be increased from 3.8 million bags to 4.29 million. In 2010, the estimate was that between 400,000 and 650,000 bags of Honduran coffee made their way across the Guatemalan and Nicaraguan borders without being registered, to be consumed under the names of these more established premium coffees. But as Dow Jones notes, "so far this season, Honduran coffee has been fetching higher prices than Guatemalan coffee, averaging $2.46 per pound through Aug. 3, as Honduran coffee gains quality recognition". This year, only 260,000 bags of Honduran origin are expected to trickle across the borders as contraband.
Not coincidentally, Honduran media are also reporting new funding of 11 million lempiras (about $560,000) invested in businesses of coffee producers in Sensenti, in the western Honduran state of Ocotepeque. The funds come from a public-private initiative supported by the World Bank and the Honduran government. About 4 million lempiras ($203,000) of the funding is in the form of loans from private and commercial sources.
A key goal is to increase the export of fine and "special" coffees in the international market. Already in 2005, the USDA report tells us, Honduras established a "Denomination of Protected Origin" for coffee from Marcala. In April 2010, the USDA reported that less than 8% of Honduran coffee produced in 2008-2009 was "specialty coffee", the kind that ends up being labeled by origin at trendy coffee shops. By April of this year, the proportion had risen to about 14%.
One of the two groups receiving funding is committed to increasing the production of "eco-friendly" coffee by 40%, which their business plan reportedly says should increase net earnings by 50% (due to the premium price that would be received for the more select coffee).
Coffee exports continuing to increase are critical if Honduras is to decrease its trade deficit on commodities. Earlier this year, the Banco Central de Honduras projected a deficit of about $6.3 million. At that point the year-to-year comparison showed the deficit larger than in the comparable period in 2010. Coffee exports were specifically singled out as promising to keep the deficit lower than would otherwise be projected. Coffee made up over 48% of commodity export income at the time of that article, with bananas far behind at just over 8%, and African palm oil, gold, melons, shrimp, sugar, silver and zinc following.
But is this all good news?
Concerns have been raised about the ecological impacts of increased coffee cultivation.
Indiana University anthropologist Catherine Tucker notes that
As long ago as 1999 a writer for Honduras This Week noted the negative ecological effects of the introduction of sun coffee, which eliminates the need for shade, and thus the incentive to maintain a more mixed vegetation that Tucker argues maintains a similar biodiversity to forests. The Honduran Coffee Institute IHCAFE in 2008 claimed that shade-grown coffee constituted 98% of that grown in the country. Ellen Mickle, who studied Honduran coffee growing for her 2009 BA Honors thesis in Environmental Studies at the University of Nebraska, placed the proportion of shade coffee in Honduras at between 65% and 98% in a 2010 article for Roast magazine.
The amounts paid most coffee workers do not constitute a living wage. US Embassy sources note that even low-wage vegetable farms paying 150 lempiras a day ($8) offered better pay than coffee picking, which paid only 80 lempiras (about $4.25). Progressive media have also questioned the use of child labor in coffee cultivation.
And then there is the question of the social impacts of coffee production, where the most valued lands are located precisely where the people with the most vulnerable economic and social positions live, including many indigenous communities. The research results are actually reasonably promising, although not due in the end to government policy so much as grass roots Honduran initiative.
Anthropologist Tucker's paper for the 2008 conference of the International Association for the Study of Commons describes strategies used by the Lenca community of La Campa, located in a coffee-producing area of western Honduras, to maintain control of land. Here, even as coffee production increased
These positive findings were tempered by observations of increased inequality, especially in land access. As Tucker notes, in a pattern unique in Central America, Honduras did not redistribute land to large coffee plantations in the 19th century, one of the factors delaying the expansion of the coffee industry there. She argues that government policy then aimed to encourage expansion of agricultural production fostered a decision to grant land titles to communities, not just individuals. Among those communities were indigenous pueblos that were able to maintain control of land as a result. Coffee production was split among more small producers, rather than concentrated in the hands of a few large landowners.
Indeed, even today the USDA report pointedly underlines this distinction:
This situation came under pressure in the 1980s, with a move to replace land titles that were communal or simply traditional (and thus undocumented) with individual titles, on the model of individual landholding familiar in the US, and favored by US-fostered Honduran governments. In parallel, new efforts went into expanding coffee cultivation, with new roads built to formerly remote locations, again with US support. While La Campa managed to control land, the circumstances involved show that this depended largely on the efforts of the local community, and in particular, on the choice made by many to seek communal, rather than individual, land titles.
In another study of the social relations of coffee production, anthropologist Erin Smith examined one cooperative marketing to the Fair Trade sector. She concluded that the Fair Trade movement was "a key contributor to sustainable income generating strategies and socio-economic stability among rural, small-scale farmers" in this cooperative, an outcome she credits to the local farmers' own ability to organize and to international NGO support.
At the same time, she cites the cost and difficulty of being certified and maintaining standards as barriers that the cooperative members had to overcome, and notes that some individual farmers were discouraged by these factors. It took time-- five to six years-- for the cooperative to see the full benefits from the Fair Trade relationship. Participants had to be willing and able to invest efforts for years to see the benefits.
The thread that runs through both of these studies is that local actions by organized groups made the difference. As the value of coffee exports increases we can expect incentives for larger landowners to seek control of more of the coffee sector to put new pressures on smallholders and communities holding land traditionally, or organized as cooperatives.
So by all means buy that new Marcala, Copan, or La Campa single-source cup in your local coffee shop. But keep an eye out for news that might indicate that you are drinking an unhealthy brew.
I myself prefer tea. But when I began doing research in Central America, I learned to drink coffee. Tea bags were imported and very expensive, especially unaffordable the summer I was given $10 a week as a stipend.
Cafe El Indio ads saturated billboards and radio. The coffee that I remember most fondly was prepared on visits to the campo, prepared from whole beans roasted one batch at a time. Back in La Lima, though, coffee came from little brown paper bags with the logo of a Plains Indian in war bonnet printed in red, where the coffee tasted a lot like the bag.
Coffee is big business in Honduras. Costa Rican and Guatemalan coffee may have more brand-visibility, but Honduras actually produces more coffee than Costa Rica, and depending on the source you consult, close to or more than Guatemala. The Honduran government has just announced projections of production for the current season that would make the country the second largest producer of washed arabica beans (the variety that is desirable for fine coffee drinking), remaining only behind Colombia.
Coffee cultivation is ubiquitous in Honduras: a USDA overview this April reports that coffee was being grown in 213 of the 298 Honduran municipios, distributed in 15 of the 18 departments that comprise the country. According to the same source, 30% of the Honduran population was employed in the coffee industry. Domestic consumption has been rising, fueled by urban coffee shops that are in demand for internet access, up 56% from 2008 to 2009. But still, most of the crop (90%) is exported.
Not all of this production comes into world markets labeled as Honduran.
Substantial amounts of Honduran beans used to end up purchased in Guatemala and mixed with Guatemalan beans, since, as a 2010 USDA report put it, "Guatemalan coffee is often sold at a premium in the international market, while Honduran coffee is typically sold at a discount". One year later, that statement had been changed to reflect a new reality; now importers are "more aware of the quality coffee that it is being produced in Honduras which has increased demand within the formal market".
Consequently, one of the reasons Honduras is expected to move into second place as a world coffee producer is "a sharp drop in smuggling Honduran beans to Guatemala" leading the year's projection to be increased from 3.8 million bags to 4.29 million. In 2010, the estimate was that between 400,000 and 650,000 bags of Honduran coffee made their way across the Guatemalan and Nicaraguan borders without being registered, to be consumed under the names of these more established premium coffees. But as Dow Jones notes, "so far this season, Honduran coffee has been fetching higher prices than Guatemalan coffee, averaging $2.46 per pound through Aug. 3, as Honduran coffee gains quality recognition". This year, only 260,000 bags of Honduran origin are expected to trickle across the borders as contraband.
Not coincidentally, Honduran media are also reporting new funding of 11 million lempiras (about $560,000) invested in businesses of coffee producers in Sensenti, in the western Honduran state of Ocotepeque. The funds come from a public-private initiative supported by the World Bank and the Honduran government. About 4 million lempiras ($203,000) of the funding is in the form of loans from private and commercial sources.
A key goal is to increase the export of fine and "special" coffees in the international market. Already in 2005, the USDA report tells us, Honduras established a "Denomination of Protected Origin" for coffee from Marcala. In April 2010, the USDA reported that less than 8% of Honduran coffee produced in 2008-2009 was "specialty coffee", the kind that ends up being labeled by origin at trendy coffee shops. By April of this year, the proportion had risen to about 14%.
One of the two groups receiving funding is committed to increasing the production of "eco-friendly" coffee by 40%, which their business plan reportedly says should increase net earnings by 50% (due to the premium price that would be received for the more select coffee).
Coffee exports continuing to increase are critical if Honduras is to decrease its trade deficit on commodities. Earlier this year, the Banco Central de Honduras projected a deficit of about $6.3 million. At that point the year-to-year comparison showed the deficit larger than in the comparable period in 2010. Coffee exports were specifically singled out as promising to keep the deficit lower than would otherwise be projected. Coffee made up over 48% of commodity export income at the time of that article, with bananas far behind at just over 8%, and African palm oil, gold, melons, shrimp, sugar, silver and zinc following.
But is this all good news?
Concerns have been raised about the ecological impacts of increased coffee cultivation.
Indiana University anthropologist Catherine Tucker notes that
coffee plantations are making incursions into important watersheds and high biodiversity forests. These processes occur in a context of climate change that is disrupting traditional expectations of weather patterns.
As long ago as 1999 a writer for Honduras This Week noted the negative ecological effects of the introduction of sun coffee, which eliminates the need for shade, and thus the incentive to maintain a more mixed vegetation that Tucker argues maintains a similar biodiversity to forests. The Honduran Coffee Institute IHCAFE in 2008 claimed that shade-grown coffee constituted 98% of that grown in the country. Ellen Mickle, who studied Honduran coffee growing for her 2009 BA Honors thesis in Environmental Studies at the University of Nebraska, placed the proportion of shade coffee in Honduras at between 65% and 98% in a 2010 article for Roast magazine.
The amounts paid most coffee workers do not constitute a living wage. US Embassy sources note that even low-wage vegetable farms paying 150 lempiras a day ($8) offered better pay than coffee picking, which paid only 80 lempiras (about $4.25). Progressive media have also questioned the use of child labor in coffee cultivation.
And then there is the question of the social impacts of coffee production, where the most valued lands are located precisely where the people with the most vulnerable economic and social positions live, including many indigenous communities. The research results are actually reasonably promising, although not due in the end to government policy so much as grass roots Honduran initiative.
Anthropologist Tucker's paper for the 2008 conference of the International Association for the Study of Commons describes strategies used by the Lenca community of La Campa, located in a coffee-producing area of western Honduras, to maintain control of land. Here, even as coffee production increased
the community has retained common property woodlots and grazing areas, and created a protected watershed in a cloud forest...forest cover expanded between 1987 and 2000, and protections of communal forests increased even as privatization proceeded in areas suitable for coffee production.
These positive findings were tempered by observations of increased inequality, especially in land access. As Tucker notes, in a pattern unique in Central America, Honduras did not redistribute land to large coffee plantations in the 19th century, one of the factors delaying the expansion of the coffee industry there. She argues that government policy then aimed to encourage expansion of agricultural production fostered a decision to grant land titles to communities, not just individuals. Among those communities were indigenous pueblos that were able to maintain control of land as a result. Coffee production was split among more small producers, rather than concentrated in the hands of a few large landowners.
Indeed, even today the USDA report pointedly underlines this distinction:
Honduras differs from other coffee-growing countries in the region because of the prevalence of small producers. 85,000 producers who annually produce less than 77 bags of 60 kg. of coffee constitute more than 90 percent of all production in Honduras and contribute to 50 percent of total exports.
This situation came under pressure in the 1980s, with a move to replace land titles that were communal or simply traditional (and thus undocumented) with individual titles, on the model of individual landholding familiar in the US, and favored by US-fostered Honduran governments. In parallel, new efforts went into expanding coffee cultivation, with new roads built to formerly remote locations, again with US support. While La Campa managed to control land, the circumstances involved show that this depended largely on the efforts of the local community, and in particular, on the choice made by many to seek communal, rather than individual, land titles.
In another study of the social relations of coffee production, anthropologist Erin Smith examined one cooperative marketing to the Fair Trade sector. She concluded that the Fair Trade movement was "a key contributor to sustainable income generating strategies and socio-economic stability among rural, small-scale farmers" in this cooperative, an outcome she credits to the local farmers' own ability to organize and to international NGO support.
At the same time, she cites the cost and difficulty of being certified and maintaining standards as barriers that the cooperative members had to overcome, and notes that some individual farmers were discouraged by these factors. It took time-- five to six years-- for the cooperative to see the full benefits from the Fair Trade relationship. Participants had to be willing and able to invest efforts for years to see the benefits.
The thread that runs through both of these studies is that local actions by organized groups made the difference. As the value of coffee exports increases we can expect incentives for larger landowners to seek control of more of the coffee sector to put new pressures on smallholders and communities holding land traditionally, or organized as cooperatives.
So by all means buy that new Marcala, Copan, or La Campa single-source cup in your local coffee shop. But keep an eye out for news that might indicate that you are drinking an unhealthy brew.
Thursday, November 11, 2010
Cold Hard Facts
What were economic conditions like in Honduras before and during the Zelaya administration? what are they like now?
Don't look to US media for the answers to these questions. The only attention US media paid to Honduras during the Zelaya administration was framed in terms of US political interests: would Honduras remain the faithful dependent ally it had been, or would engagement with ALBA allow the country to establish an independent course guided by its own social interests? US media were pre-destined to cover the coup and its aftermath as a story of global power struggle between US interests and those of ALBA.
But as we have emphasized since the beginning, drawing on Honduran scholarship and reporting in Honduran news media and governmental and international sources of information, the Zelaya administration, and the coup that removed it, had a lot more to do with combating the conditions of economic inequality in the country, and experiencing push-back from those whose interests were not served.
So it is especially gratifying to see a mainstream English-language newspaper cover the economic context. Of course, it has to be a British paper. Jonathan Glennie, writing in the Guardian's "Poverty Matters Blog", has a terrific article that lays out the economic facts.
Let's summarize:
before the start of Zelaya's term:
2001: 60% of the population lived below the poverty line
2005: this number reached 66% of the population living below the poverty line
2005: urban unemployment stood at 6.5%
2005 data show that 47% of income was earned by the 10% of the population; 2.1% of the income was earned by the bottom 10%.
during the Zelaya administration:
2006 data show that 42.4% of income was earned by the 10% of the population; 2.5% of the income was earned by the bottom 10%.
In 2007, urban unemployment had declined to 4%
By 2007, the proportion of those living below the poverty line dropped to 60.2%
The minimum wage was increased over 60%.
School lunches were extended to 200,000 more children (a 25% increase).
Over the first three years of the Zelaya administration, economic growth averaged 5.6%
since the coup that illegally removed Honduras' president:
The economy contracted -3% in the year following the coup.
This kind of analysis-- no matter how it is substantiated, including with citation of Millennium Challenge Corporation data-- normally brings out the worst in commentators on this blog, who use weird anecdotal arguments to counter national and international, objective, data, and try to muddy the overall picture by selecting one or another of their favorite scandals and claiming it counters all the data confirming that Zelaya was good for the Honduran economy and was effecting modest decreases in economic inequality.
(We particularly like the commentators who cite the cost to maintain ex-President Zelaya's horse. Definitely on a par with the current right wing media claims that President Obama's trip to India is costing $2 billion.)
But the numbers don't lie.
So bravo to the Guardian for providing one of the first serious economic analyses in mainstream English-language media of the economics of the Zelaya administration.
Don't look to US media for the answers to these questions. The only attention US media paid to Honduras during the Zelaya administration was framed in terms of US political interests: would Honduras remain the faithful dependent ally it had been, or would engagement with ALBA allow the country to establish an independent course guided by its own social interests? US media were pre-destined to cover the coup and its aftermath as a story of global power struggle between US interests and those of ALBA.
But as we have emphasized since the beginning, drawing on Honduran scholarship and reporting in Honduran news media and governmental and international sources of information, the Zelaya administration, and the coup that removed it, had a lot more to do with combating the conditions of economic inequality in the country, and experiencing push-back from those whose interests were not served.
So it is especially gratifying to see a mainstream English-language newspaper cover the economic context. Of course, it has to be a British paper. Jonathan Glennie, writing in the Guardian's "Poverty Matters Blog", has a terrific article that lays out the economic facts.
Let's summarize:
before the start of Zelaya's term:
2001: 60% of the population lived below the poverty line
2005: this number reached 66% of the population living below the poverty line
2005: urban unemployment stood at 6.5%
2005 data show that 47% of income was earned by the 10% of the population; 2.1% of the income was earned by the bottom 10%.
during the Zelaya administration:
2006 data show that 42.4% of income was earned by the 10% of the population; 2.5% of the income was earned by the bottom 10%.
In 2007, urban unemployment had declined to 4%
By 2007, the proportion of those living below the poverty line dropped to 60.2%
The minimum wage was increased over 60%.
School lunches were extended to 200,000 more children (a 25% increase).
Over the first three years of the Zelaya administration, economic growth averaged 5.6%
since the coup that illegally removed Honduras' president:
The economy contracted -3% in the year following the coup.
This kind of analysis-- no matter how it is substantiated, including with citation of Millennium Challenge Corporation data-- normally brings out the worst in commentators on this blog, who use weird anecdotal arguments to counter national and international, objective, data, and try to muddy the overall picture by selecting one or another of their favorite scandals and claiming it counters all the data confirming that Zelaya was good for the Honduran economy and was effecting modest decreases in economic inequality.
(We particularly like the commentators who cite the cost to maintain ex-President Zelaya's horse. Definitely on a par with the current right wing media claims that President Obama's trip to India is costing $2 billion.)
But the numbers don't lie.
So bravo to the Guardian for providing one of the first serious economic analyses in mainstream English-language media of the economics of the Zelaya administration.
Wednesday, October 6, 2010
Emergency Foretold
The Lobo Sosa government seems to exist only between the emergencies. First there was the agricultural emergency in which the government, two weeks before the end of planting season, realized it needed 12,000 more acres of beans to be grown this year to avoid shortages, and allocated money and seed to farmers to encourage planting of beans.
Then there were the many emergency decrees resulting from the natural disasters like tropical storms Agatha and Matthew, where roads, bridges, and hillsides have collapsed, been destroyed or otherwise become useless, with significant impacts on industries such as coffee that need to ship their products to market.
Another emergency decree called for the construction of jails. Honduran jails are terrible, with prisoners having all kinds of contraband, including weapons, cell phones, and drugs. The facilities are run down, even by Honduran standards, and in recent years over 100 prisoners were killed when an electrical fire swept through a prison near La Ceiba. A new maximum security prison is under construction near Choloma, and there's one near Tegucigalpa, but Security Minister Alvarez wants more because he plans to arrest more criminals. This emergency decree allows for private investment in prisons, as we do in the US.
Another emergency decree was against dengue, a mosquito borne fever that has killed over 70 Hondurans this year. The coup in 2009 brought a halt to the mosquito eradication programs that had been successful in keeping mosquito populations, and therefore dengue infections, at a low level.
There have been emergency decrees because of the high violent crime rate in Honduras as well. This has brought us the unified police and military patrols that confound best practices for either group. The military aren't trained to maintain civilian order. They don't know the law and so repeatedly violate civilians' rights; but then, so do the police.
Now it's the emergency foretold, a bean shortage. Yesterday in the council of Ministers, yet another emergency decree, for the purchase of ten million lempiras worth of beans on the international market. This is made necessary by the loss of nearly 60 percent of the annual crop this year because of rain and flooding. These beans will be stored by the government in its own grain silos and distributed through the BANASUPRO stores that sell government subsidized food.
At the beginning of July, beans sold on the open market for about 28-30 ($1.47 - $1.58) lempiras for a five pound measure. By the end of August, that price had risen an average of 16 lempiras ($0.80) to 45 lempiras for a five pound bag of beans. By October 4, the end-of-August price had more than doubled to 100 lempiras ($1.05 per pound), or more than three times what beans cost in July.
A bean shortage due to losses from heavy rains, this time in October, also happened in 2008. However, then, the price never exceeded $0.72 a pound in pulperias. In 2009 the Zelaya government put in place a strategic reserve to prevent the recurrence of this shortage. The de facto Micheletti regime sold the strategic reserves to raise cash for itself in 2009.
Honduras is facing a similar situation to El Salvador, where just this week beans rose from $0.55 to $0.95 per pound, and to Nicaragua, where in the same time period, bean prices rose from $0.64 to $0.97 per pound. Nicaragua will allow its commodity brokers to import a large quantity of beans from elsewhere duty-free. The government of El Salvador will buy beans directly for sale, as will Honduras. All three Central American governments have promised they will closely supervise their commodity brokers to see that there is no hoarding or speculation.
Beans are an essential protein source in the average Honduran's diet. Meat and eggs are luxuries but beans are eaten at every meal. These price increases mean that some Honduran families will go without necessary food this year. The newspapers already have stories about entire communities on the edge of starvation with no government help in sight. The Lobo Sosa government's emergency decrees will not help there.
Then there were the many emergency decrees resulting from the natural disasters like tropical storms Agatha and Matthew, where roads, bridges, and hillsides have collapsed, been destroyed or otherwise become useless, with significant impacts on industries such as coffee that need to ship their products to market.
Another emergency decree called for the construction of jails. Honduran jails are terrible, with prisoners having all kinds of contraband, including weapons, cell phones, and drugs. The facilities are run down, even by Honduran standards, and in recent years over 100 prisoners were killed when an electrical fire swept through a prison near La Ceiba. A new maximum security prison is under construction near Choloma, and there's one near Tegucigalpa, but Security Minister Alvarez wants more because he plans to arrest more criminals. This emergency decree allows for private investment in prisons, as we do in the US.
Another emergency decree was against dengue, a mosquito borne fever that has killed over 70 Hondurans this year. The coup in 2009 brought a halt to the mosquito eradication programs that had been successful in keeping mosquito populations, and therefore dengue infections, at a low level.
There have been emergency decrees because of the high violent crime rate in Honduras as well. This has brought us the unified police and military patrols that confound best practices for either group. The military aren't trained to maintain civilian order. They don't know the law and so repeatedly violate civilians' rights; but then, so do the police.
Now it's the emergency foretold, a bean shortage. Yesterday in the council of Ministers, yet another emergency decree, for the purchase of ten million lempiras worth of beans on the international market. This is made necessary by the loss of nearly 60 percent of the annual crop this year because of rain and flooding. These beans will be stored by the government in its own grain silos and distributed through the BANASUPRO stores that sell government subsidized food.
At the beginning of July, beans sold on the open market for about 28-30 ($1.47 - $1.58) lempiras for a five pound measure. By the end of August, that price had risen an average of 16 lempiras ($0.80) to 45 lempiras for a five pound bag of beans. By October 4, the end-of-August price had more than doubled to 100 lempiras ($1.05 per pound), or more than three times what beans cost in July.
A bean shortage due to losses from heavy rains, this time in October, also happened in 2008. However, then, the price never exceeded $0.72 a pound in pulperias. In 2009 the Zelaya government put in place a strategic reserve to prevent the recurrence of this shortage. The de facto Micheletti regime sold the strategic reserves to raise cash for itself in 2009.
Honduras is facing a similar situation to El Salvador, where just this week beans rose from $0.55 to $0.95 per pound, and to Nicaragua, where in the same time period, bean prices rose from $0.64 to $0.97 per pound. Nicaragua will allow its commodity brokers to import a large quantity of beans from elsewhere duty-free. The government of El Salvador will buy beans directly for sale, as will Honduras. All three Central American governments have promised they will closely supervise their commodity brokers to see that there is no hoarding or speculation.
Beans are an essential protein source in the average Honduran's diet. Meat and eggs are luxuries but beans are eaten at every meal. These price increases mean that some Honduran families will go without necessary food this year. The newspapers already have stories about entire communities on the edge of starvation with no government help in sight. The Lobo Sosa government's emergency decrees will not help there.
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