FAO Initiative on Soaring Food Prices

Latin America and the Caribbean

Agriculture has for many years been a source of economic growth and well-being in Latin America and the Caribbean region. Between 1990 and 2005, the sector grew an average of 3 percent per year, a higher rate than the overall economy. This growth was spurred by profitable beef and dairy industries, sugarcane and soybean farming that also supply the biofuels sector, and production of tropical fruits.

High food prices and hurricanes

Yet the region is now threatened by the recent rise in staple food prices. In addition, the summer’s hurricanes and tropical storms left Haiti and farming in other island states in ruins.

In July 2008, Bolivia, Colombia, Haiti, Nicaragua, Paraguay, Trinidad and Tobago all had food inflation rates of more than 20 percent compared with July 2007. The price of food in Venezuela was nearly 50 percent higher for the same period.

In Haiti the price of rice had gone up by 89 percent in July compared with July 2007, and in Bolivia rice had doubled over the same period.

Dollar weakness

The shock is especially harsh in countries that are dependent on food imports to meet consumption needs and where national economies are pegged to the US dollar. As the dollar loses value against many currencies, so does this erode consumer power in economies linked to the  dollar.

Prices for yellow maize, a major staple imported from the United States, for example, have skyrocketed and had a ripple-effect along the market chain: chicken and eggs have likewise increased along with the cost of animal feed.

FAO's immediate support: seeds and fertilizers

FAO has allocated around $5 million of its own resources to provide 16 countries with seed, fertilizers and other agricultural inputs for the current planting season (where applicable) as well as the next planting season.

National assessments of these input distribution projects have been conducted and a subregional synthesis for the Caribbean has been compiled.

FAO has also mobilized around US$15 million from various donors and the total amount allocated to the Latin America and Caribbean region amounts to around US$20 million.

Additionally, inter-agency assessment missions have been fielded to Haiti and Bolivia.

Toward local seed production

Two regional assessments, one in Central America and one in the Andes, have resulted in two separate proposals to reinvigorate and strengthen regional seed systems so that seed required for farming is largely produced by the internal market.

In the Andean countries of Bolivia, Ecuador and Peru, for example, there would be a focus on the root and tuber crops, as well as support to livestock raising, whereas in Central America, the focus would be on maize and local bean varieties. For information on the project proposal to increase Andean farming communities' access to quality seed, click [here], and for information on the project proposal to boost community-based seed production in Central America, click [here].

Bread is a hard sell in Haiti
maize prices mean even tortillas are too expensive in their native land