GUATEMALA: High Staple Food Prices Drive Up Hunger

• by Danilo Valladares (guatemala city)
• Tuesday, January 25, 2011
• Inter Press Service

And although the government of social democratic President Álvaro Colom recently decreed a new rise in the minimum wage despite resistance from businesses, which threatened to lay off thousands of workers, the minimum wage still falls short of covering the cost of the basic basket of goods and services.

'The price of corn is higher than it has been in four years, at 125 quetzals (15.60 dollars) per quintal (100 lbs),' compared to 98 quetzals (12.20 dollars) in 2009, Gustavo García, with the United Nations Food and Agriculture Organisation (FAO), told IPS.

The cost of black beans has also gone up, from 422 quetzals (52.70 dollars) per quintal in 2009 to 458 quetzals (57.20 dollars) in 2010, FAO reported.

Corn and black beans form the main part of the subsistence diet of millions of families in rural Guatemala, where 72 percent of the country's poverty is concentrated, according to official statistics.

Half of Guatemala's 14 million people live in poverty, and 17 percent live in extreme poverty, according to U.N. figures, although unofficial estimates put the proportion much higher.

García explained that the drought that hurt a large share of the country's crops in 2009 was then compounded by flooding caused by heavy rains in 2010, which in turn caused outbreaks of pests that ruined much of what was left of the subsistence crops of poor rural families.

The Ministry of Agriculture, Livestock and Food reported that from January to September 2010, 72,000 hectares of crops were lost, including 44,000 hectares (1.5 quintals) of corn and 25,000 quintals of beans.

The most affected areas are the eastern, central and west-central provinces that make up the so-called 'dry corridor', a semi-arid area frequently plagued by drought in the winter, with low farm yields and harsh living conditions.

'Most families here lost half of their crops during the September to December harvest, and will have no corn for five or six months,' said García.

As a result, they will have to buy corn at high prices, but to do so they will have to overcome the difficulties of finding work, García said.

According to FAO, a Guatemalan family of six normally consumes 32 quintals of corn and seven quintals of beans per year. But consumption will decline as a result of the rise in prices.

Just under 50 percent of children in Guatemala are malnourished -- one of the highest malnutrition rates in the world, the U.N. children's fund, UNICEF, reports.

The volatility of grain prices is not only a problem in Guatemala, but a global challenge that mainly affects the poor.

'Recent bouts of extreme price volatility in global agricultural markets portend rising and more frequent threats to world food security,' says the December 2010 FAO report 'Price Volatility in Agricultural Markets'.

Extreme weather events, heavier reliance on international trade to meet food needs, and a growing demand for food commodities from other sectors, especially energy, are undermining food security, the report adds.

Countries must 'explore or reinforce measures to protect the most vulnerable, including through emergency food reserves,' FAO says, adding that 'In the long run, countries can lower their vulnerability by raising agricultural productivity for a diverse set of crops that proves both competitive and sustainable, as well as by promoting dietary diversification.'

But fighting hunger remains a complex problem in Guatemala, since the minimum wage does not cover the costs of living.

On Jan. 1, the Colom administration increased the minimum wage for agricultural and non-agricultural workers to 273 dollars a month, with the exception of workers in the maquila textile export assembly plants, whose minimum wage is 257 dollars.

In 2007, before Colom took office in January 2008, the minimum wage was 183 dollars a month.

The National Statistics Institute estimates the cost of the basic basket of goods and services at 490 dollars a month. That includes food, clothing, housing, education, health, transport and other goods and services for a family of five.

José Cubur with the Committee for Campesino Unity (CUC), a small farmers' association, told IPS that the increases in the minimum wage have been 'minimal' while prices of basic food products have been rising steadily.

'No agreements between business and the trade unions on increasing the minimum wage have been reached in a long time,' he said. 'In the end, the president decreed a hike, but it was small, and does not cover the basic basket of goods and services.'

Trade unionist Victoriano Zacarías told IPS that although a rise in the minimum wage was decreed, 'many laws are not enforced' in Guatemala.

He said the real minimum wage should be 490 dollars a month. 'That way we would be fighting hunger, illiteracy, the high levels of violence and the lack of health care,' he said.

Luis Linares, a former Guatemalan labour minister who is now with the Association for Social Research and Studies (ASIES), an independent research centre and think tank, told IPS that if there were no minimum wage law, wages would be even lower.

He also said the minimum wage cannot be equivalent to the basic basket of goods and services because in order to set the minimum wage, other factors must be taken into consideration, such as productivity levels, overall wages and salaries in the country, conditions for business and the inflation rate.

'Otherwise, it would be very difficult for the companies to pay the minimum wage,' he said.

In fact, after the latest hike in the minimum wage, Guatemala's businesses threatened to lay off thousands of workers, claiming they could not afford to pay it.

In order to boost the economy and fight poverty, the state should generate decent jobs, and that requires better training for workers and improved conditions for companies, Linares said.

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service

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