The Associated Press June 20, 2011, 8:03AM ET

Climate, government controls hit Bolivia's farmers

Bolivia's farmers were hit from all sides last year -- drought, floods and wildfires -- forcing the poor Andean nation to import staple foods on an unprecedented scale.

But nature wasn't the only cause. Farmers also blame the government for imposing price controls and export restrictions instead of letting the free market prevail as it does in nearly all the other Latin American countries similarly suffering bad weather.

In Bolivia's eastern lowlands, soybeans that would ordinarily have been exported languished in their silos because they could not find local buyers.

"We were already being battered by the climate when the government came out with these decrees prohibiting exports," said Demetrio Perez, a soy farmer who is president of the National Association of Oil Seed Producers. "With the restrictions, an incentive to plant more was lost."

Sunflower crops rotted in the fields because farmers could neither sell locally nor get export licenses from an inefficient bureaucracy.

"It was a disaster," said Susano Terceros, who lost part of his sunflower crop.

The political cost for President Evo Morales is high. After winning re-election by a landslide in 2009, his approval rating is now about 45 percent. He is now seeking advice from the farmers, including agribusinessmen in the pro-capitalist east where his fiercest political foes reside.

In December, at a time when food shortages were already being felt, the government decided to eliminate gasoline subsidies, which would have raised fuel prices more than 70 percent. Thousands took to the streets in protest, forcing Morales to back down.

His government had imposed price controls and an export ban on corn, wheat, sugar and other staples in 2007. Two years later, it added vegetable oils, sunflower seeds and soybeans to the list of staples that could only be exported if officials decided the domestic market was adequately supplied.

Export controls are necessary to prevent food from being smuggled out to neighboring countries such as Peru, said Nemecia Achacollo, the government's rural development minister.

"The government is like a mother who has to look out for all her children," Achacollo told The Associated Press. "It's not acceptable for (food) to be exported while leaving shortages in the domestic market."

Bolivia has long produced most of its food, but imports of sugar and corn shot up 68 percent to $143 million in the first three months of this year to compensate for slumping output.

A double whammy of floods and severe drought dramatically shrank the land area under cultivation last year, while fires blackened fields in the eastern lowlands that produce most crops. Now, the high plains are suffering erratic weather.

Golden fields of wheat and oats near the town of Achacachi wilted last month under early snows.

"The oats didn't grow and aren't good for anything but animal feed," lamented Avelino Miranda, a 70-year-old Indian farmer, as he cut the dry, shriveled crops. He said his son has moved to Argentina, seeing no future here.

Loading oats onto a truck in dry fields nearby, 60-year-old Modesto Bautista said his oat crop was also stunted by the harsh weather. He blamed climate change.

Scientists caution that a single year is too short a time frame to ascribe crop damage to long-term climate change. But a study published in last month's journal Science by researchers from Stanford University and Columbia University said global warming since 1980 has had an impact on crop yields, pushing up prices of wheat and corn crops.

Unlike their neighbors, Bolivian farmers rely heavily on rainfall rather than irrigation, and they have been hit by particular severe climate swings during the El Nino and La Nina weather phenomena over the Pacific Ocean.

Chile, Peru, Brazil, Paraguay, Argentina and Colombia have all avoided shortages in recent years, even though some have suffered spells of destructive weather.

Argentina suffered its worst drought in 40 years in 2009, with heavy losses of cattle, wheat and corn. Yet although prices increased, there were no shortages. Rains damaged much Colombian farmland this year, but prices have increased only slightly and no shortages have occurred.

In Bolivia's eastern province of Santa Cruz, its agricultural heartland and a bastion of anti-Morales sentiment, farmers say price and export controls are as much to blame for the country's food woes as the weather.

Land under cultivation in their region shrank from more than 750,000 hectares (1.8 million acres) in 2009 to 620,000 hectares (1.5 million acres) in 2010. Corn suffered the biggest decline, from 150,000 hectares to 90,000 hectares (370,000 acres to 220,000 acres).

Part of the reason was drought, but Perez said the government shared the blame because the low price it dictated for corn became a disincentive to plant it.

Earlier this year, thousands of tons of sugar were smuggled out of Bolivia. The government, powerless to halt the entire outflow, was forced to let the price rise to nearly double.

Annual food inflation, 18.5 percent in March, was the third highest in the region behind Venezuela and Paraguay, according to U.N. figures.

Now Morales, himself a former coca farmer, is calling food his top priority and is asking farmers for advice.

"Advise me, help me. Let's work together to guarantee food production," he said last month at a meeting with sugar growers. "If we've had ... ideological differences, that's in the past. Now the situation is different."

Morales has made a series of concessions and spending decisions that have been welcomed by the otherwise distrustful farmers. One concession is to stop opposing the introduction of genetically modified crops other than soybeans. This month, he submitted a bill that would allow more GM crops.

He also announced plans to invest $1 billion in farming projects in the next four years, and is starting to spend $100 million this year on water and irrigation projects as a hedge against future dry spells.

Some sugar farmers have accepted $20 million in new government loans, and corn farmers are pleased that the government is now paying 10 percent more for their crops to supply a state-run food distribution company.

But most corn, sugar and soybean production remains in the hands of farmers in Santa Cruz, and they say they want the government to ease up on regulation and encourage investment.

"We can't fight the ravages of nature, but what's doing the most harm are inappropriate policies that discourage production," said Gary Rodriguez of the National Institute of Foreign Commerce, a leading business group.

"Farmers already have plenty to deal with coping with the climate."

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Associated Press writers Ian James in Caracas, Venezuela, Debora Rey in Buenos Aires, Argentina, and Vivian Sequera in Bogota, Colombia, contributed to this report.


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