Friday, September 30, 2011

Too Gay For Honduras

I was frankly amazed to read in Thursday's El Heraldo that Ricky Martin, the Puerto Rican pop singer who is openly gay, might be denied a visa to enter Honduras and give a concert, solely because he's gay.

None the less, that's more or less what Áfrico Madrid, Interior Minister, (the man who banned Halloween in Honduras) told El Heraldo. In an interview he said that he had received pressure, though no written requests, from the church organizations of Honduras to deny him a visa because he was a bad example for families in Honduras. Madrid told El Heraldo:
"It is through the departmental rules that we will analyze the request they presented to hold the event and in all cases it is the management, based on the convenience and to safeguard the moral and ethical principles of our society, that will authorize or not the event."

"Representatives of the Christian churches, Evangelical and Catholic of Honduras, have asked that we not authorize the permission because he is not a good family example,....this is not the type of family that the laws of Honduras and Honduran society want to construct and promote in the young and the rest of the population."

Ricky Martin, openly gay since 2010, lives with his two children and his partner.

Just to be clear, Honduras cannot legally deny a person admission just because they are gay. As Sandra Ponce was forced to point out today in response to Áfrico Madrid's insanity, to deny him entrance would be a violation of the Honduran constitution, human rights, and international treaties to which Honduras is signatory.

But the fine points of law, like the Honduran constitution and human rights, often seem to be beyond the grasp of Áfrico Madrid.

Thursday, September 29, 2011

National Party Split

The fissure in the National Party has become an open split.

Ricardo Alvarez, the Mayor of Tegucigalpa with presidential aspirations, and Miguel Pastor, current head of SOPTRAVI, have formed a caucus of 25 Congress persons from the National party, splitting with Juan Orlando Hernandez, and promising a legislative agenda of their own. Three of the four fired Ministers have pledged to join the group as well (Oscar Alvarez, Armando Caledonio, and Nasry Asfura).

This split has the effect of denying the National Party a straight line ability to pass legislation without consultation. While still large, with 46 members, the National Party caucus loyal to Juan Orlando Hernandez no longer forms a majority.

Congressman Antonio Rivera Callejas, a member of the newly formed caucus, loudly denies that it has anything to do with presidential politics.

According to Callejas it has everything to do with the lack of support given to the Ministers who Lobo Sosa recently fired. "They were the people who were lending credibility to the Lobo Sosa government," Callejas told El Heraldo.

On the other hand, La Tribuna reported that Callejas completely undercut his denial when he told them
"This is the beginning of a legislative alliance between the Congress people supporting Ricardo Alvarez and Miguel Pastor, and for now it is only for legislative affairs, but I hope that later on it will become an electoral alliance."

Mario Barahona, another member of the caucus, said
"Miguel Pastor and Ricardo Alvarez are a guarantee of triumph and we understand this..."

Barahona went on to explain that it was, in fact, an alliance of those who support the political aspirations of Miguel Pastor and Ricardo Alvarez and to complain of being marginalized and mistreated by Juan Orlando Hernandez.

Juan Orlando Hernandez thought the cause was presidential politics:
"I'm very sorry that we haven't finished even the second year of governing and we are already in this debate, but such are politics,"

he said, when consulted about the split. Celine Discua, head of the National Party caucus in Congress said that this was "treason, and in the past, we've seen what happens to traitors."

This is a break. We would argue that their words are confirmation that Presidential politics was indeed the cause, more than two years before the election. What it will mean legislatively remains an open question.

Wednesday, September 28, 2011


No one was more surprised than Oswaldo Canales when he was not re-elected head of the Consejo Nacional Anti-Corrupción. In the election, Dulce María Zavala, representative on the council of the Asociación Nacional de los Empleados Públicos (ANDEPH), won the backing of 7 of the 10 representatives present.

Canales attributes his loss to his having told the truth:
"Telling the truth in this country is a sin,"

Canales told the press.

Now Juan Ferrera, council member representing Foro Nacional de Convergencia (FONAC) says it was a "plot", hatched six months ago, to wrest control of the CNA from the religious organizations.
"In the organizations, they discussed the idea that neither of the two church organizations (catholic and evangelical) should assume the coordination of the CNA, in light of their having left many problems, especially when they did that of June 28 and they have to be in some form the moral force that should remain and accompany the CNA assembly, but they should not coordinate the council."

The "plot" was said to originate in the Executive Branch, with Zavala's candidature having the support of Porfirio Lobo Sosa.

The CNA was founded in 2001 and "reinstalled" in 2005 with the ambitious goals of promoting transparency in government, developing public morality, to prevent, control, and combat corruption in government. The religious organizations have predominated in leadership roles since it was founded.

Citing a potential loss of autonomy in the CNA, the three groups that didn't vote for Zavala are thinking about pulling out of the CNA for the time being. They fear that Zavala, representing the government employees union, will politicize the jobs within the CNA, appointing party activists. Others within the CNA see this as a secularization of the organization.

What the election has done is highlight a pre-existing split between the religious organizations and the secular ones who were members of the CNA. The CNA has been largely ineffective under church leadership since 2005.

It will be interesting to see if the secularization of the CNA can make it more effective at dealing with corruption in government.

Tuesday, September 27, 2011

Putting the "General" in General Election

It is (semi) official.

Romeo Vasquez Velasquez, infamous as the general who commanded the armed forces during the coup d'etat in June 2009 and throughout the de facto regime of Roberto Micheletti when the military brutalized the Honduran people, wants to be the next president of Honduras.

Prensa Latina reports that Vasquez will run at the head of the Alianza Patriótica Hondureña party. To be able to run, his advisers are reportedly telling him to resign this October from his post-military position as manager of Hondutel, a plum post given to him after he stepped down from the military.

The same advisers suggest that if he does run, he risks the re-activation of legal actions against him for the forcible (and illegal) removal from Honduras of José Manuel Zelaya Rosales. They are quoted as saying
"The politicians created the crisis, so it would not be strange if they exculpated themselves and for their political relaunching they would implicate the military".

Despite this danger, Prensa Latina reports that Vasquez will register as the candidate of the Alianza Patriótica Hondureña and start his run for president in October, the month of the Armed Forces. The article describes APH as "a military-civic organization that intends to 'rescue the country from underdevelopment'".

The new report comes shortly on the heels of stories in the Honduran press saying that the Christian Democrat Party was thinking of drafting Vasquez Velasquez as its candidate. These rumors were sparked by a birthday visit with Ramón Velásquez Názar, vice-president of the Christian Democrat Party.

A background in the armed forces has not, until now, been a recommendation for candidates for president under the constitution adopted in Honduras in the 1980s. But then, the coup and its aftermath clearly changed the role of the military in modern Honduras. Ex-army officers running for president probably goes along with the rest of the package.

Friday, September 23, 2011

Not-so-Special Justice

Last Friday, the Chief Justice of the Supreme Court, Jorge Rivera Áviles, rescinded his order of August 8 prohibiting the naming of police officers as court officers in relation to cases that involve raids and the dislodging of campesinos from land.

His reversal followed his participation Tuesday in a meeting between representatives of the Supreme Court, Military Command, the Police, and the Ministers of Defense and Security.

Previously the appointment of police officers to oversee the proper legal actions in police operations of these types was seen as a bad thing. Now its not seen by the Chief Justice as a problem.

At the meeting on Tuesday it was decided that the judiciary and security forces would no longer rely on local judges for court orders in their operations in the Bajo Aguan. Instead they will use special court officers, jueces ejecutores ("distrainor" in English, defined as the legal officer who seizes goods for debts, apparently used with a slightly wider meaning in this instance).

With no local connection, these jueces ejecutores will be flown in to the area, then escorted back to where they came from.

Why do they need special justices?

The military believes there is a problem getting court orders to dislodge campesinos who have invaded the plantations of the large land owners in the Bajo Aguan. They claim that local judges are reluctant to issue the orders because they fear for their lives.

The judges issuing the orders must physically be present during the operations by the military. According to at least one story in La Tribuna, they have been not showing up, causing operations to be canceled. By bringing in legal officers from other areas, this presumably will be avoided.

But these will not be just any legal officers: they will be police officers, overseeing the actions of other police officers.

This is a bad idea.

Its a bad idea because it makes the Police both Judge and Executioner. The legal system is designed as a series of checks and balances; this removes one of the checks.

Ana Pineda, the Minister of Human Rights, was not included in the Tuesday meeting that led Rivera Aviles to reverse his original decision. Pineda was supposedly consulted by phone about the appointments and gave her approval. We can only assume she didn't know that Rivera Áviles was going to rescind his order against having police officers appointed to these positions.

Thursday, September 22, 2011

Buy High, Sell Low

ENEE, the Empresa Nacional de Energia Electrica, the state owned electric company of Honduras, knows how to drive a business into bankruptcy: buy electricity at horrendously high rates, and sell it for less to the consumers in Honduras.

Seriously, this is the ENEE business plan: to lose money.

Prices were set with the goal of subsidizing the cost of electricity for the poor, here defined by how much electricity they consume in a month.

Prices were reset higher in 2008 during the Zelaya administration, and at that time ENEE was authorized to charge an energy cost surcharge on top of the usage charges. The subsidy for the poor was expanded into higher usage tiers.

At this point, no one in Honduras is paying the actual cost of electricity, not businesses, not the wealthy, not the poor. Somehow what started out as subsidy for the poor got expanded to everyone. Is it any wonder ENEE runs at a loss?

Blackouts are once again common in Honduras, especially in the area around San Pedro Sula, in the western part of the country, in the central part around Yoro, and in Olancho. This is because domestic production of electricity is insufficient to meet demand, and the distribution system in the country is incapable of distributing the excess production in other parts of the country to the parts that lack electricity.

This was entirely expected and preventable.

The electricity shortage was the subject of a 2007 US Embassy study, as well as a 2010 World Bank one. Both predicted Honduras would need more power than is generated in the country by 2011, and accurately predicted how much more power was needed.

Many of the neighboring Central American countries produce excess electricity. ENEE cannot buy this excess production because the interconnects linking its distribution system to those of its neighbors are inadequate and outdated.

ENEE is under government orders not to buy any additional electricity produced by bunker oil or diesel generating plants.

Yet, earlier this year it placed a request for bids for 50 megawatts of so called "thermal" power. At the time it received bids costing $0.34/KWh to $0.54/KWh. Roberto Martinez Lozano, manager of ENEE, rejected all the offers then as being too expensive.

Now Martinez Lozano wants to buy electricity at $0.50/KWh, and wants to sign a contract at that rate for the next two years.

Who gains?

The Finnish firm Wartsila, which offered the electricity at $0.16/KWh, as long as the government of Honduras buys and transports the fuel. At current market prices that raises the cost to ENEE to around $0.48-50 KWh.

ENEE sells this electricity back to businesses and consumers for less than it pays for it.

According to the US Embassy, in 2007 ENEE paid about $0.14 KWh and sold electricity for an average of $0.08 KWh.

Nearly 25% of electricity is not paid for, compared with a Central American average of 15%. Only about 10% of that total is transmission line loss. The remainder is due to billing errors, illegal connections, and fraud.

Wednesday, September 21, 2011

Freedom for Suspected Drug Figure

Today a Honduran judge let suspected drug operator Eduardo Elias Handal Saybe go free, for what he called lack of "compelling proof" linking him to a private home with a storage building that yielded coca leaf paste, chemicals used in the processing of cocaine, strips of lights used to light runways, and weapons.

According to the Public Prosecutor, Handal Saybe, along with the Guatemalan Juan Carlos Garcia Urbina, are heads of the Zeta's operation in Honduras. The Zetas appear to have armed the Mara Salvatrucha MS-18 in Honduras. Weapons found in the warehouse last March correspond to the same lot as weapons captured in Mexico in the hands of the Zetas, and weapons found in the hands of MS 18 prisoners in the main San Pedro Sula prison.

On the basis of what was found in the warehouse, registered in Elias Handal Saybe's name, an Interpol arrest warrant was issued for Handal. He was captured in Nicaragua on September 12 and extradited back to Honduras.

Yesterday his defense lawyer, Walter Ramirez, successfully argued that someone else had used Handal's name to register the property, and that his signature had been forged.

Handal Saybe is a partner is several limited partnerships. They include PRODUCTOS PLASTICOS INTERNACIONALES, S.A., registered in Panama, with Carlos Alberto Yacaman Meza, the assassin of Roland Valenzuela, who before his death had broadcast serious charges of US complicity in the 2009 coup.

Yacaman Meza is in prison in Florida appealing a deportation order to Honduras.

Handal Saybe remains at liberty.

Tuesday, September 20, 2011

Cover Up in the Bajo Aguan?

Competing stories have developed about what happened in the Bajo Aguan last Friday, when a combined military-police patrol alleges it was ambushed by foreign guerrillas at La Consentida plantation, near Sonaguera.

The official story today, as told by Secretary of Defense Marlon Pascua, is that foreigners ambushed the patrol in the La Consentida orange plantation. Found at the scene were rifle bullet casings (other reports specify AK-47 casings) and fragments of an exploded grenade. Pascua is quoted as saying
"The intent of these bands is that we not patrol this sector, that the patrols not do their job..."

Well, that's one theory... Its not clear how Pascua knows the intent of the attackers with such certainty, nor why he knows with the same certainty that the attackers were foreigners. Surely by now his troops have had enough time to identify all the foreigners in the zone. Yet as of yesterday, none of the identified foreigners were doing anything suspicious, according to the military.

Pascua went on the radio to tell everyone he's given the patrols permission to return fire if fired upon.

Meanwhile, the campesinos of MUCA tell a much different story about what happened on Friday.

The MUCA spokesperson, Vitalino Alvarez, told La Tribuna that the site of the supposed ambush is not one where ambush is possible. The road is straight, and there is no forest nor bushes to hide in.

According to him, a drunken soldier detonated a grenade inside his patrol vehicle. There are no guerrillas in the Bajo Aguan, he told La Tribuna, only people dedicated to their work.

Vitalino Alvarez was quoted El Heraldo as saying:
"It was a grenade that exploded in the cabin of the car. Also I was at the hospital when they arrived; there was a boy wounded only in the lower legs below the knee; could they shoot him only below the knee.... Another had a wound only on his nose produced by a grenade fragment. If it had been a rife shot, he'd be dead."

El Heraldo's coverage today makes it clear that both the Police and Military agree with the MUCA spokesperson that grenade fragments were in the passenger compartment of the truck, and that it was the driver and passenger in the truck that died, from the explosion of a grenade on the floor of the truck.

Yet the spokesperson for the Xatruch II batallion, Roger Martinez, claims to have bullet casings from Falk rifles, AK-47s, and .22 calibre rifles. He also claims the area where the ambush occurred is forested. He denied there were grenade fragments in the cabin of the car. A grenade would have dismembered the occupants, according to Martinez.

The only Falke rifles I can find are all air rifles; probably the patrol was not ambushed by pellet guns! Perhaps he meant FN-FAL rifles, which are in abundant use by the Army in Honduras according to Janes, and take the very same caliber ammunition as the AK-47, 7.62 mm. NATO standard ammo.

A .22 rifle would be an insane thing to use to attack an armed military patrol. It is 1850s military technology.

It is good for rabbit and squirrel hunting, though.

Guerrillas in the Mist

So Friday someone shot up a combined military and police patrol, part of the Xatruch II operation, in the Bajo Aguan, just as it was about to turn into the La Consentida orange plantation of Rene Morales. One police officer and one soldier were killed, and three others wounded.

The initial description was that the attack was made with shotguns, but later it was characterized as employing large caliber weapons, e.g., military rifles.

Interestingly, there's no indication from press accounts that those "ambushed" either returned fire, or came under fire beyond the initial salvo that killed two and wounded three others. The encounter is not described as a firefight. No suspects were either found or detained in the region.

The military has concluded the attack was not the work of campesinos, because of the strategy used. Police reached the same conclusion, according to spokesperson Juan Martinez. They point to the use of surprise and violence as un-campesino-like behavior. Like the media, the security forces characterize the event as an ambush.

The reaction by security forces was to stop and question all foreigners coming through the district, although to no avail:
"None of them could be tied to anything illicit,"

said Martinez.

But that, of course, did not stop the military from reaching conclusions.
"It's a dedicated band of guerrillas,"

said Joint Chiefs Chair General Rene Osorio on Sunday.

There is another, unexamined, group in the Bajo Aguan that has both licensed and unlicensed weapons of the type used in the attack, and military training.

During the 2009 coup, landowners there hired paramilitary mercenaries from Colombia and Paraguay to be the "guards" on African palm plantations.

According to the UN Working group on Mercenaries in 2010, more than 120 paramilitaries from various Latin American countries are present in the Bajo Aguan.

The military, as part of Xatruch II, has not apparently thought to inspect, regulate or interdict the arms used by these paramilitary guards, only those campesinos were suspected of using.

Until the paramilitary guards employed by land owners in the Bajo Aguan are subject to the same scrutiny as the campesinos, the military surely cannot conclude that there is a band of foreign or foreign-trained guerrillas operating in the Bajo Aguan.

Friday, September 16, 2011

Fissures in the Nationalist Party

Ex-president Rafael Leonardo Callejas acknowledged the necessity of working on the unity of the Nationalist party in light of the latest decisions of the president, Porfirio Lobo...

With these words, La Tribuna highlighted what we've been observing for a while: there is a division in the Nationalist Party, in its own way perhaps as bad as the divisions within the Liberal party in Honduras.

Nowhere is this more apparent than in the deep rift that has developed between Ricardo Alvarez, head of the Nationalist party and Mayor of Tegucigalpa, and Porfirio Lobo Sosa.

It is normal in Honduran politics for the president to appoint only members of his party to ministerial positions, and to then pack their employment rolls with party loyalists as well. Under pressure to manufacture a "government of unity and reconciliation", Lobo Sosa didn't do that. He not only appointed opposition party members to Ministerial posts, but also allowed them to hire whomever they pleased. And some of those appointments have brought him criticism from party loyalists.

Most visibly, for weeks, Ricardo Alvarez has been calling for Cesar Ham's head, demanding Lobo Sosa replace him and all the other "reconciliation" government members from other parties with National party loyalists. This concern also seeped into his response to Lobo Sosa's recent removal of Oscar Alvarez, Mario Canahuati, and other government officials.

In reaction, Ricardo Alvarez is reported to have said
"With respect to the changes I can say that I respect the decisions (but) I cannot say in this moment whether I share them or not because I do not understand them, because we are talking about five ex-officials of the first order, good Hondurans, excellent employees, and extraordinary Nationalist party members."

Two of those dismissed (Oswaldo Guillén and Nasry Asfura) are followers of Ricardo Alvarez's movement within the National party, and Oscar Alvarez was widely rumored to be a protege.

Lobo Sosa and Ricardo Alvarez were supposed to meet this morning to discuss the firings, but at the last minute, Lobo Sosa canceled out.

(He opted instead to attend a ceremony at which he was awarded an honorary doctorate for his "support of non-discrimination" for hosting the Summit of Afrodescendent Peoples in August. The honorary degree was conferred by the Centro de Estudios para la Democracia Popular of Chile, la Universidad Internacional Euroamericana de España y la Universidad de la República de Chile. You can see why that would be more important than meeting with the leader of a major movement in the party of which he is the sitting president.)

He attributed the criticism from his fellow party members to "ambitions and economic interests."

Oscar Alvarez and Mario Canahuati, like Ricardo Alvarez, have presidential aspirations. This is a complication in relationships within the Nationalist party, including those to Porfirio Lobo Sosa. While a Honduran president cannot run for re-election, he certainly can extend his influence through relationships with candidates vying within his party for nomination.

Exhibit A: ex-president Callejas, stepping in to try to promote party unity, he says. No fan of Lobo Sosa's "government of reconciliation", he called on Lobo to rethink it before the end of the year and undo it.

So are Ricardo Alvarez and Rafael Callejas being unfair to Lobo Sosa? Maybe not.

While Lobo Sosa states that those dismissed were fired because they failed to meet his goals for them, Eduardo Facussé noted that the dismissals favor the presidential candidacy of the head of the Congress, Juan Orlando Hernandez, to the detriment of Ricardo Alvarez.

Although his critics within the Nationalist party are not his rivals for office, because he cannot be re-elected, they are potential rivals for leadership within the party. Lobo Sosa has promoted positioning of the Nationalist party as a force of "Christian humanism" since before he was inaugurated, a position also endorsed by Ricardo Alvarez.

More distinctive has been his allegiance to the idea of what originally was called a "government of unity and reconciliation" when the US promoted it as evidence of unification after the coup. Long after there is anything to gain from this concept, long after it has become a problem for him with his own party, and despite a lack of effectiveness on the part of some of his "unity" appointees, Lobo Sosa seems to think this distinction is worth defending.

Hence his reply to the harangues from his own party:
"It's not important to me, the price I have to pay for the intolerance of a few leaders of my party who question constantly my government of integration...they will not vanquish me."

Thursday, September 15, 2011

Oscar Alvarez Fired Over Proposed Law

Porfirio Lobo Sosa got around to admitting late yesterday that the proposed law that Oscar Alvarez sent to Congress is what got Alvarez fired. It seems that Alvarez usurped Lobo Sosa's perogative by not clearing it with Lobo Sosa first:
"The Secretaries of State do not have the power to initiate legislation, its the President that has that through his Secretaries of State, that is clear, that no Secretary of State can introduce a law unless instructed by the President."

The Secretaries here are part of Lobo's cabinet. Alvarez was for example, "Secretaria de Estado en despacho de Seguridad (Secretary of State for Security)". Lobo Sosa makes it clear that Alvarez did not consult with him on the proposed law, and that there is an existing law for cleaning up the Police which observes their due process and human rights.

Clearfield Rice Production System In Honduras

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.

Wednesday, September 14, 2011

Rolling back the Security Tax

Media inside and outside Honduras are reporting on actions Wednesday by the Honduran Congress removing the security tax originally promoted by former security minister Oscar Alvarez, supported by Juan Orlando Hernandez, head of Congress, and Porfirio Lobo Sosa.

This tax was what Alvarez was counting on to buy Super Tucanos and other new equipment for the military.

The English-language coverage by Reuters foregrounded complaints that the new tax was "crimping" mining. A Mexican version of Reuters' article led with the fact that the reform would cut taxes charged mining companies by more than half, from 5% to 2% taxes on raw minerals.

A 3% tax on bank withdrawals was removed entirely. Allowed to continue without alteration were a 1% tax on mobile phone companies, and a 0.5% tax on fast food companies.

The reform also introduced new taxation on credit card issuers.

In arguing against the security tax, the business community claimed that, rather than producing the projected $79 million the government originally estimated, the tax would produce more that $230 million.

In Honduran coverage, the actions taken were described as "reforms".

Included in this coverage was a proposal (defeated) to rename the act the "Law for Strengthening State Finances". This, reports said, would help address such criticisms by the business community, which Honduran media said suggested that funds raised might be used to finance political campaigns.

If the Honduran coverage is to be believed, the passage of the reforms illustrates the depth of suspicion of the honesty of politicians -- and an echo of this is seen in the Reuters coverage citing suspicion by businesses that the law would bring in more than estimated, although the international media don't report the charge that these funds could end up being used in political campaigns.

After the reforms, the head of the financial commission of Congress estimated the tax will produce more than $116 million. This seems to be an acceptable level of funding for the business community; the English-language Reuters article quoted an approving voice from COHEP, Gabino Carbajal, saying
"The current changes made to the reform now put the taxes at levels where private enterprise can survive."

It is hard to imagine that the timing of these changes is unrelated to the removal of Oscar Alvarez, the patron of the original legislation, from the Lobo Sosa cabinet. And it makes absolutely clear the power wielded by the mining sector in Honduras.

Pompeyo Bonilla

So who is Honduras's new Minister of Security, Pompeyo Bonilla? What's his recent resumé like?

Pompeyo Bonilla Reyes was a National Party Congressman from La Paz in June 2009 when he voted to remove President Manuel Zelaya Rosales from office.

Porfirio Lobo Sosa appointed him to head the Instituto de Propiedad (IP), the government department that issues land titles in March, 2010. In December 2010 he served on the intervention committee that investigated INA's actions in the Bajo Aguan for improprieties.

Lobo Sosa then appointed him to head the Comisión Nacional de Telecomunicaciones (CONATEL) in 2011.

Shortly after he assumed control of CONATEL, it issued a resolution suspending the issuing of low power FM broadcasting licenses for community radio stations. CONATEL argued that the frequencies were saturated in almost all departments in Honduras, and that it wanted to return these frequencies for use by the big broadcasters (so called high power FM broadcasters) to use as repeater frequencies. Low power FM broadcast licenses had first been authorized in 2005 as a way to democratize telecommunications in Honduras. Another of Bonilla's acts at CONATEL was to foster legislation authorizing wiretapping.

Pompeyo Bonilla Reyes is clearly someone Porfirio Lobo Sosa trusts. His government service is sure to be emphasized in coverage of the new office he is assuming.

Honduran sources, however, are reminding people of another episode in his long public career.

Bonilla started out in the military, and was an aide to General Oswaldo Lopez Arellano, who became head of state twice through military interventions (1963-71, and 1972-1975). During Lopez Arellano's second term as president, Honduras was given a moon rock by US president Richard Nixon. When that moon rock turned up for sale in Florida in the late 1990s, Bonilla was one of a group of individuals identified by La Prensa as possible suspects in the theft of the moon rock, which was government property. The moon rock had been kept in the Honduran presidential palace. It disappeared around 1994, and was tracked down in 1998 by federal investigators.

The US court convicted a different person, retired colonel Roberto Agurcia Ugarte, as responsible for selling the moon rock to a US collector, a retired member of the US military named Allen Rosen, who testified that he bought it from a member of the Honduran Armed Forces. But it is telling that in Honduras, Pompeyo Bonilla was considered capable of taking national property and selling it for personal gain.

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.

Monday, September 12, 2011

Journalist Murdered: 16 and Counting Since the Coup

Since June 28, 2009 16 journalists have been murdered in Honduras.

Thursday, a reporter for Radio Uno in San Pedro was murdered in an ambush as he drove from his farm to his home in Puerto Cortes.

The reporter, Medardo Flores, was part of the finance section of the Frente Amplio de Resistencia Popular (FARP), the political wing of the Frente Nacional de Resistencia Popular (FNRP).

He was the second Frente member to be murdered that week. On Monday Mahadeo Roopchand Sadloo, an Indian immigrant known as "Emo" with more than 30 years of residence in Honduras, was murdered in Tegucigalpa.

Porfirio Lobo Sosa has ordered an investigation of these killings, but denies any government involvement.

Oscar Alvarez, until Saturday the Minister of Security, consistently said that all of the previous murders of journalists were because of common crimes or personal circumstances, which was convenient since that told the police what to conclude when they conduct their inadequate investigation.

There are some things to note about the reporting of the latest murder.

First, the Tiempo and El Heraldo newspaper stories are based on an AFP report.

The AFP stated that many people suspect that these recent murders are political crimes. El Heraldo cut that from their version of the article, preferring to give Oscar Alvarez the last word. Proceso Digital argues that the victim was not really a reporter, only a graduate of Radio Uno's popular journalism school. In this, they follow EFE's coverage, which also leaves out any mention of the other 15 journalists killed since the June 2009 coup d'etat, many of whom also had ties to the resistance movement.

Those who carried out the 2009 coup learned that they can get what they want by force, and that they can act with impunity. By cultivating the idea that Honduras is just a violent country, they and the successor government of Porfirio Lobo Sosa have argued that these deaths are not due to the specific activities of the journalists who died, but acts by common criminals-- although the lack of evidence and ineffective investigation doesn't give the security forces any real basis to say that.

The people who murdered Medardo Flores waited in ambush. Until proven otherwise by a believable, professional investigation, the assumption that this was a political act by someone opposed to the FNRP seems like a theory of the crime that any effective police force would investigate, not just reject out of hand.

Sunday, September 11, 2011

Judge, Jury, and Executioner

Oscar Alvarez, the now ex-Minister of Security, sent a law to Congress September 6 for the cleansing of the police of corrupt officials. In it, he proposed that he serve as judge and jury, and be allowed to fire anyone from officers, inspectors, cadets, and the police auxiliary, without them having recourse to due process, or any process at all.

Here's the complete text of the law he sent to Congress:

Article 1: Authorize the Secretary of State for Security to the effect that he proceed with free discretion to terminate the career of classified staff in the Superior Executive, Basic Inspector, Cadets and Auxiliaries of the National Police.

Article 2: You are entitled to compensation consisting of one month's salary for each year of service you've provided, if you accept the retirement offered by the Head of the Secretariat of State.

Article 3: The organic law of the National police (e.g., the police charter) shall not apply to any of the provisions of this law.

Article 4: Authorizes the Secretary of State for Finances to make budget adjustments in support of the implementation of this law.

Article 5: This law takes effect on publication in La Gaceta and is in effect until 27 January 2014.

That's how Alvarez was going to clean up corruption in the Police.

Article 1 would have given him unchecked power over everyone in the police. He could have forcibly retired anyone, by simply ordering it. Article 3 would have removed all due process and appeal rights. Article 2 sets the severance pay to compensate those dismissed under the proposed law.

This level of unchecked power is unprecedented and likely would have been a violation of the due process and presumed innocence clauses of the Honduran Constitution.

Even assuming Oscar Alvarez is an angel with good intentions who would not abuse it (an untenable assumption!), this proposed statute doesn't really solve the problem. It merely pushes aside presumed corrupt police officers without punishment, allowing others to move forward to replace them. The presumed corrupt officials would not be punished; instead, they would be rewarded with severance pay and their accrued retirement benefits intact.

But then, this kind of absolute power is nothing new to Alvarez, who was a special forces officer in the Battalion 3-16 during the 1980s.
"The Argentines came in first, and they taught how to disappear people,"

Alvarez told the Baltimore Sun in 1995.

Isn't disappearing someone making a decision about their future without them having recourse to due process?

Alvarez told the Sun that Battalion 3-16 was supposed to have allowed for due process, but took the easy way out. The Sun wrote, quoting Alvarez:
"What was supposed to happen was that the intelligence unit would gather information and take it to a judge and say, 'Here, this person is a guerrilla, and here's the evidence," he said. "But the Hondurans did not do that." Slashing his finger across his neck, he said, "They took the easy way." And, he said, "U.S. officials did not protest."
Instead of becoming all powerful with the passage of the law he proposed, instead Oscar Alvarez was dismissed by Porfirio Lobo Sosa this weekend.

Alvarez has left Honduras for the United States to join his family, which lives in the US, and "reflect".

Especially if he intends to run for president, the traces of his history of authoritarianism are worth keeping in mind. And there is no indication yet that the law he proposed has been withdrawn.

Resigning Himself: Oscar Alvarez, Presidential Candidate

As we reported Saturday, Porfirio Lobo Sosa is in the process of making changes in his cabinet and has gone beyond that to make a series of changes in top level security positions nationally and in the northwest region.

The article in El Heraldo on Saturday was headlined "Remezón en Secretaria de Seguridad de Honduras": "Aftershocks in Security Secretariat of Honduras". It referred to the "separación" of former minister Oscar Alvarez. It noted that a press conference later in the afternoon was expected to clarify the matter, "la que en algunos medios se ha manejado como una destitución y en otros como una renuncia" ("which in some media has been treated as a firing, and in others as a resignation").

There were plenty of advance indications that might have pointed towards this outcome. On September 1, as he was headed on his way to Kosovo, Lobo Sosa told Honduran media that on his return he would make changes in his cabinet. El Heraldo quoted him saying that he would retain Cesar Ham as head of the Instituto Nacional Agraria, but otherwise not promising security to any cabinet member.

On Friday, September 8, back in Honduras, La Tribuna reported that Lobo Sosa said that he "already had in his possession the resignations of all of his cabinet ministers, so that 'in the coming hours' he would determine 'which ministers will go'" ("ya tiene en su poder la renuncia de todos sus secretarios de Estado, por lo que 'en las próximas horas' determinará 'qué ministros se van'").

So comes the day after, and what do we hear?

Oscar Alvarez is out in public with statements to the press, making sure that everyone understands that he resigned, he was not fired. The Associated Press story, reported from Tegucigalpa by Freddy Cuevas and translated in typically uncritical way by the AP, runs with Oscar Alvarez' preferred narrative:
A top leader of Honduras' battle against rampant drug violence has resigned, saying he lacked economic support for his efforts and had been stepping on the toes of powerful interests.

But this is nonsense. Yes, he tendered his resignation. That is how top government officials are replaced, in the US as much as in Honduras. As Lobo Sosa said on Friday, he had in his possession resignation letters from all his cabinet ministers. It was then his decision who to let go, and who to keep. The original reporting was all correct-- every fired cabinet minister had first assented by resigning. But that doesn't make them any less fired-- removed by Lobo Sosa, for reasons he is unlikely to ever share with the press or public.

A President is not put in the position of publicly firing a cabinet member unless things have really broken down. Diplomacy would call for a cabinet minister removed from office to say something equivalent to "I serve at the pleasure of the President": to note the successes achieved and point to the future.

But not Oscar Alvarez, bless him. He is not going quietly.

El Heraldo's report on his statements to the press sums it up in the headline "I didn't succeed in cleaning up the police nor work as I had expected". It quotes Alvarez extensively from the press conference he gave to present his side of the story:

First, I would like to say to the Honduran people that our post has always been at the disposition of the President and today he has made use of the faculties that the law confers on him....

(Primeramente quiero decirle al pueblo hondureño que nuestro cargo ha estado siempre a disposición del señor Presidente y el día de hoy él ha hecho uso de las facultades que la ley le confiere)

I have not accepted another post. I am not about to accept any job, but rather a commitment that I have with my beloved homeland, Honduras....

(“no he aceptado otro cargo. No se trata de aceptar un trabajo cualquiera, sino un compromiso que tengo con mi querida patria Honduras”)

I did not achieve my objective of cleaning up the National Police of Honduras. I was not able to work as I had expected for lack of economic support; despite the numerous limitations there were attained some noteworthy successes because we were affecting interests related with kidnapping, organized crime, drug trafficking, money laundering and other crimes"...

(“No logré mi objetivo de depurar la Policía Nacional de Honduras. No he podido trabajar como tenía previsto por la falta de apoyo económico, a pesar de las numerosas limitaciones se alcanzaron logros destacables porque estábamos afectando intereses relacionados con secuestro, crimen organizado, narcotráfico, lavado de activos y otros delitos”)

In relation to my immediate future, I want to inform the Honduran public that this is a moment to plan, redefine, and reorient my efforts and my actions. We three leave with our heads held high and our conscience clear having made every undertaking, effort, and labor to turn back the insecurity that we inherited.

(“En relación a mi futuro inmediato, quiero informar al pueblo hondureño que este es un momento para plantear, redefinir y reorientar mis esfuerzos y mis acciones. Salimos los tres con la frente en alto y la conciencia tranquila de haber puesto todo empeño, esfuerzo y trabajo para revertir la inseguridad que heredamos”)

If that sounds like a political speech, well, that's because it is.

Oscar Alvarez has been widely rumored to be a candidate for president in the National Party in the next election.

That, as much as his failure to contain violence targeting journalists and activists that has kept Lobo Sosa's government in the spotlight for international human rights violations, may have contributed to his ouster, which, however much he might like us to think this was entirely his decision, this clearly was.

As the Honduran press reports on the cabinet changes noted, Lobo Sosa has said previously that he would remove any government official planning to run in the next elections (which will take place in fall 2013, but for which party primaries take place next year).

What we saw at the press conference given by Oscar Alvarez was not (just) an offended cabinet minister surprised by his removal.

We saw the first public statement of a campaign platform for a real law-and-order candidate whose theme will clearly be, given more funding I could have done more and look how much I accomplished...

Saturday, September 10, 2011

More Ministers Out?

HRN, a Honduran radio station, is reporting that there are more changes in the Lobo Sosa government. At the moment, they report that a total of 4 Ministers have either resigned or been fired: Oscar Alvarez (Security), Mario Canahauti (Foreign Relations), Oswaldo Guillen (DEI), and Nasry Asfura (FHIS). Specifically, it is reporting that Guillen and Asfura were fired, while Alvarez and Canahuati reportedly resigned.

La Tribuna reports that a document detailing all the changes is currently being written and they will be announced at a press conference later today.

La Tribuna also speculates that Alejandro Ventura, Minister of Education will become Ambassador to Brazil and congressman Javier Menocal will take his place. They also speculate that Bernard Martinez, Minister of Culture, will be replaced by Mireya Batres, reprising the role she had earlier in Nationalist administrations.

Shakeup at the Ministry of Security!

Updated at 11:30 PDT

Honduran newspapers are reporting that both the Minister of Security, Oscar Alvarez, and the Vice Ministers Armando Calidonio and Roberto Romero Luna have been removed from their offices. La Tribuna is reporting that Alvarez is currently meeting with Porfirio Lobo Sosa.

Also removed was the head of the Police in San Pedro Sula, Hector Ivan Mejilla, and the head of the traffic police (Transitos) for northwest Honduras, Guillermo Arias.

The head of the northwest (San Pedro Sula) sector of the DNIC-- the national investigative police, equivalent to the FBI-- Oscar Garcia Mendez also is reported by Tiempo to have lost his office. El Heraldo says that General Marco Tulio Palma Rivera, the current national Director of the DNIC, is becoming head of the national police.

Tiempo says that the new Minister of Security is Pompeyo Bonilla, current head of CONATEL. El Heraldo reports that General Luis Muñoz Licona is moving into the cabinet as the Vice Minister of Security.

Updated at 11:30 PDT

El Heraldo now reports that Ramon Sabillon Pineda will replace vice minister Calidonio. Sabillon Pineda was the head of operations for the national police prior to this elevation. General Jose Luis Muñoz Licona is the replacement for Vice Minister Roberto Romero Luna.

Thursday, September 8, 2011

Spending 5 Million Lempiras More Than You Have

As the person given control over the Ministry of Culture under the de facto regime of Roberto Micheletti in 2009, Myrna Castro spent more than 120 million lempiras ($6.48 million) in her short but notorious tenure.

And not all of that spending, it turns out, was adequately documented. In fact, pretty much none of it was.

The Tribunal Superior de Cuentas (TSC) audited the books of the Secretaria de Cultura, Arte y Deportes (SCAD) for the period July 1, 2009 to January 27, 2010 and reached the following conclusions:
"The results of our examinations disclose violations of the Law of the Accounting, the Law of Government Contracts, the Budget law, and the Law for the Protection of National Patrimony."

So wrote Martha Cecilia Rodriguez, head of the auditing department of the TSC, in a note to Bernard Martinez, the current Minister of Culture.

The audit was a result of reports of mismanagement of public resources, deficiencies in accounting practices and administration, and erroneous and suspicious decisions that appear to violate the law.

During the audited period, the SCAD took in 115 million lempiras while spending 120 million lempiras. Of this amount, there were no accounting controls on more than 111 million lempiras ($6 million) of spending.

So what were the problems? You name it, there's an example, usually an outrageous one.

The SCAD bought equipment to wire the Casa de Morazan museum for electricity. It also purchased curtain rods. These expenditures were identified as wasteful, because they preceded clearing these modernizations of the historic building with the Institute of Anthropology and History. The Institute did not approve them, since-- as should have been obvious to any qualified occupant of that position-- their installation would have damaged or destroy part of the national patrimony.

The Vice Minister for Sports simply transferred funds to the sports federations without requiring them to document how the funds were spent.

More than 12 million lempiras of funding supplied by the Organization of IberoAmerican States (OEI) were spent without supporting records to show what they were spent on.

To quote from the letter the TSC sent to Bernard Martinez again:
"this could cause the financial resources given to the sports federations, decentralized institutions and non-profit civil institutions to have been used for activities unrelated to the purpose for which they were assigned."

Another problem found was that some vendors delivered equipment which did not match what was ordered, and the deliveries went unchallenged in SCAD.

SCAD also gave away government equipment without following legal procedures.

The Vice Minister for Sports seems to have been a particularly egregious contributor to the total failure of accounting controls.

He took 92,000 lempiras as a loan from funds belonging to the Junior Orchestra Program to buy sports uniforms for athletes participating in a Central American event, but only repaid 52,000 lempiras of the loan amount, leaving 40,000 unaccounted.

But then, he says it wasn't really his fault. The Vice Minister told the TSC that, because of an order from Ms. Castro on 11 November, 2009, he was not in control of the funds to be used to repay the loan. Her letter instructed him that only she had the authority to use the resources assigned in his budget, and so the shortfall was not covered.

Ironically, Castro herself now works in the Tribunal Superior de Cuentas, not in audit, but in the Institutional Development department.

Her explanation for the 12 million lempiras missing from OEI funds suggests that perhaps she should be in a different line of work:
"Finances made the transfers to bring them [the projects] more rapidly to a conclusion. When I got there, things were already in motion. If we've already got the funds, we must carry out the project tied to a budget period and an operational plan."

Notice she doesn't mention any need to account for how the funds were spent?

What she appears to be saying is, if you've got the money, you have to spend it, not that you have to account for how you spent it. It's as if I gave you money to buy a new car, and you bought computers instead. The money's gone either way, but not necessarily for the reasons it was allocated in the first place.

The TSC stopped short of accusing Castro of having violated any laws.

It did demand a repayment of 20,000 lempiras from her, and and equal amount from her Vice Minister for Sports, to cover the missing 40,000 lempiras that belonged to the Junior Orchestra Program.

But otherwise, there doesn't seem to have been any actual accountability. Which would be funny if it weren't typical of the treatment of the actions that took place after the 2009 coup, when the de facto regime treated laws as unnecessary constraints.

Tuesday, September 6, 2011

Super Tucanos

The head of the Honduran Armed Forces, General René Arnoldo Osorio Canales wants to buy 4 "Super Tucano" Embraer EMB-314 light attack aircraft. Everyone in Central America appears to be buying Super Tucanos and General Osorio doesn't want to be left out. Guatemala is expected to buy 8, El Salvador 6, Nicaragua 3, and Panama 4. The US has proposed to buy 100 of these for counterinsurgency operations. Even Honduras's model for everything security related, Colombia, has 25 Super Tucanos. Osorio also wants to buy helicopters and fast naval launches.

Osorio wants 8 "Super Tucanos" but because of the economic crisis in Honduras he'll settle for 4. The Secretary of Defense, Marlon Pascua, has asked the United States to donate 4 others, along with helicopters.

He proposes to buy these for slightly more than $40 million dollars with funds that will come to him from the new "Ley de Seguridad Poblacional" which promises to funnel lots of money to the Armed Forces and National Police, if it survives legal challenges. The "Ley de Seguridad Poblacional" is expected to bring in around 1,500 million lempiras this year alone. The entire purchase price of 4 Super Tucanos is around 760 million lempiras, or slightly more than half the expected receipts.

Honduras bought 12 Embraer EMB-312 Tucanos, the predecessor to the Super Tucano, in 1984, but virtually everyone who bought that model that long ago has retired them, or is in the process of retiring them. Repair parts are hard to get. When Honduras brought this up with Brazil, they suggested Honduras buy the Super Tucanos. It is unknown how many of Honduras's original fleet of 12 Tucanos are still flying, but one recently crashed in Comayagua.

How do the two aircraft compare? Both aircraft have the same wingspan, but the Super Tucano has a longer fuselage (about 1.5 meters longer), a much more powerful engine, and as a result, a slightly reduced operating range. It can carry slightly less payload (1200 lbs versus 1300 lbs), but can fly 100 kph faster than the Tucano. Despite being of Brazilian manufacture, over 70% of the parts are American. The speed and agility, and armaments are the keys to its success in drug interdiction missions.

The General explained that the main use of these aircraft will be in drug interdiction (forcing drug aircraft to land, not shooting them down). After the Dominican Republic bought and deployed its fleet of Super Tucanos, and used them to intercept drug flights, drug runners stopped overflying the Dominican Republic according to Time Magazine.

Unfortunately, these aircraft are built to order with at least a two year lead time. Even if it ordered them today, it would be 2013 or 2014 before they could be delivered, and still longer before they could have an effect on drug trafficking in Honduras.

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
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.