It was believed years ago that Latin America would soon come out of its eternal poverty, even reaching a zero hunger rate by 2040. But both the pandemic and the war in Ukraine slowed down growth, with the rise in prices of export products such as fertilizers and grains. With prices so high and employment on hold, many families fell from their economic situations to more dire situations.
Janet Yellen, Secretary of the Treasury of the United States, spoke of the great dilemma. “There is a very real risk that skyrocketing food and fertilizer prices on the world market will drive more people hungry, further exacerbate inflation and hurt the fiscal and external position of governments”. Carolina Trivelli, Peruvian advisor to the Food and Agriculture Organization of the United Nations (FAO) and an authority in the region on the issue of hunger, believes that it is necessary to intervene in the face of the imminent emergency.
Trivelli assures that famine and poverty were already important factors in the region before the pandemic, but that global crises have amplified these dilemmas. The pandemic impoverished a large part of the countries, depending on the immediate actions of governments against it; with special bonuses or social protection programs. Even so, poverty increased greatly, coming to manifest itself in the cities. It also didn’t help that the expected economic growth for 2021 was slower than anticipated and relied more on informal employment.
MIRA: Poverty will not be reduced without sustainable measures
The poorest 20% of Peruvians allocate an average of 53% of their expenses to food consumption, plus 25% to transportation, fuel, energy and home care expenses. These two items account for more than 80% of its consumption. A 10% increase in prices is a brutal blow to these families. Since people can’t stop taking public transportation or paying for their electricity, they reduce their food consumption. So they eat less or replace more nutritious food with lower quality food.
“Things are just beginning”
The war would only delay the rise in prices, says Trivelli. “This will only grow and enlarge. First, it is already hitting the region with the increase in fuel prices. Second, it is already hitting the increase in food prices that many countries import such as wheat and sunflower, vegetable oils and corn. And the other thing is that fertilizer prices have skyrocketed, and Latin America and the Caribbean is a net importer of synthetic fertilizers. Not only will the costs of producing food rise this year, those productions that are going to come out even next year are going to be more expensive.” Therefore, food producers will use less fertilizer, which will lead to less food planting, which will advance famine. Available food will be more expensive. This will affect Latin America and the Caribbean, because only producers with greater financial support will be able to use fertilizers, with which inequality in the rural world will increase. There is going to be a negative distributional effect that is going to leave small-scale farmers more impoverished, without fertilizers and with less income.
Although he does not believe that society has stopped, since he recognizes that governments have acted with precision. Reducing tariffs, opening common pots, or reducing taxes. But he believes that it is not enough since they are expensive actions and that they do not include the most vulnerable populations to be favored. Actions to help vulnerable populations require State funds, which right now many governments do not have due to economic backwardness due to the pandemic. Although in Peru there is a slight advantage in this dilemma, since as a mining and oil exporting country, it does not require as much fertilizer and we can cover more money to face the crisis.
Trivelli is primarily concerned with the children, and how delicate a position they are in. To do this, she suggests making a transfer, school feeding programs or food donation. The second thing, he suggests, is to have a plan for fertilizers, to avoid drastic drops in production. Aid programs, whether they are purchases from the Government to the Government, direct subsidies for fertilizers, delivery of vouchers for small-scale producers so that they can fertilize. Finally, he believes the transition to the use of more efficient fertilizers, towards promotion schemes, of more supportive international trade between countries that produce fertilizers and grains. Interregional trade can benefit us both. Fertilization techniques that require more work but less fertilizer expense.