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Posted: Thursday 23 June, 2022 at 6:43 PM

In World Bank-IICA dialogue, Latin American and Caribbean countries outline actions to cushion vulnerable populations against price hikes for food and production inputs

The countries thanked the institutions that organized the dialogue and insisted on the need to strengthen support for their initiatives and on the importance of joint action in achieving this
By: (IICA), Press Release

    The international organizations jointly organized the virtual meeting, mainly to share various perspectives on the situation in the region and to discuss the extent to which the critical situation is endangering food security, by severely and negatively impacting agricultural production costs


    San Jose, 22 June 2022 (IICA) – Ministers and vice ministers of Agriculture of Latin America and the Caribbean outlined emergency policies that their countries are implementing to mitigate the impact of price increases for food and the necessary production inputs, as a result of the war in Eastern Europe.
    In the discussion with Carlos Felipe Jaramillo, World Bank Vice President for Latin America and the Caribbean Region, and Manuel Otero, Director General of the Inter-American Institute for Cooperation on Agriculture (IICA), the ministers and senior officials exchanged information and perspectives on how to bolster food security in the region, given the current inflation and supply chain disruptions.
    The international organizations jointly organized the virtual meeting, mainly to share various perspectives on the situation in the region and to discuss the extent to which the critical situation is endangering food security, by severely and negatively impacting agricultural production costs.
    Participants in the meeting included Esteban Valenzuela, Minister of Agriculture of Chile; Zulfikar Mustapha,  Minister of Agriculture of Guyana; Fernando Mattos, Minister of Livestock, Agriculture and Fisheries of Uruguay; Ariel Martínez, Undersecretary of Policy Coordination at Argentina’s Ministry of Agriculture, Livestock and Fisheries; Fernando Zelner, Deputy Secretary for Trade and International Relations at Brazil’s Ministry of Agriculture, Livestock and Food Supply; Andrés Pareja, Undersecretary of Agricultural Innovation Networks at Ecuador’s Ministry of Agriculture and Livestock ; Carlos Rognoni,  Vice Minister of Panama’s Ministry of Agricultural Development; Hugo Fernando Obando, Vice Minister of Development of Family Farming and Agricultural Infrastructure  and Irrigation at Peru’s Ministry of Agricultural Development and Irrigation; and Salvador Fernández, General Coordinator of Rural Development at Mexico’s Secretariat of Agricultural and Rural Development.  
    The countries thanked the institutions that organized the dialogue and insisted on the need to strengthen support for their initiatives and on the importance of joint action in achieving this.
    Diego Arias, Agricultural Manager for Latin America and the Caribbean at the World Bank, was the moderator.
    Minister Valenzuela explained that, “In Chile, we have developed a program called Chile Apoya, aiming to control prices and to assist the most vulnerable families. Already 3 billion dollars have been invested to provide food subsidies to 1,700,000 people, that is, 10% of the country’s population”.
    The Chilean minister also indicated that there is a push to increase the cultivation of lettuce and other crops traditionally produced for domestic consumption, which has waned in recent years, due to the increased production of fruit and other products destined for export.
    Zulfikar Mustapha reported that, “In Guyana, the State is absorbing the increased costs for agricultural inputs, in order to contain production costs and increase food security”.
    The Minister, who recently pledged his country’s support for the hemispheric partnership proposed by IICA to tackle growing threats to food security in the region, indicated that the effects of climate change are seriously endangering food security in Guyana.
    For example, he mentioned that in 2021, Guyana experienced one of the most severe floods in its history, which wiped out 80% of the agriculture sector.
    Uruguayan minister, Fernando Mattos, recalled that even prior to Russia’s invasion of the Ukraine, the global food situation was already precarious, given the significant changes in international food inventories, as a result of breakdowns in many production regions.
    He warned that, “Although many exporting countries have enjoyed increased income, due to food price increases, this is also creating internal inflationary pressure that is impacting the lower income population. Many countries are also prioritizing internal supplies and therefore have limited their exports, which has reduced the grain supply”.
    In reference to the international food distribution, Mattos felt that, “The situation is prompting increasingly nationalistic positions and trade restrictions, which is making the scenario even worse.
    Andrés Pareja said that Ecuador is simplifying and eliminating procedures for companies that import agricultural products, indicating that, “We also have programs that subsidize producers, so that they can acquire inputs, such as urea. We are also promoting associative efforts and cooperatives, which will enable producers to engage in large-scale agriculture. Our actions focus on the lower-income population”.
    Ariel Martinez criticized those in various international forums who are proposing a single production model to transform agrifood systems. He recalled that, “Argentina and other countries in the region had warned of the potential for food security problems, due to a limited supply. The COVID-19 pandemic and the war in Europe have proven this to be true”.
    Martínez stated that Argentina imports 70% of its fertilizers and so this has been a hard blow. He also hit out against trade barriers, stating that, “Our country is exporting increasing amounts of food, and yet, more and more stakeholders are distorting the market with subsidy packages and non-tariff barriers. IICA has played an important part in explaining that our region’s farmers must be defended and that we are part of the solution to the global problem”.
    Zelner reported that Brazil is engaging in what it has called “fertilizer diplomacy”, which is simply strengthening contacts with large non-European producers, to guarantee the supply.
    The official also reported that Brazil had reduced its tax on fuel, given that its price is a major contributor to food prices. He also proposed that there be a more humanistic vision of sustainable development. “The emphasis on environmental policy has been excessive, while disregarding the social impact on vulnerable populations”.
    Salvador Fernández stated that Mexico had implemented a plan to combat inflation and rising prices, indicating that, “Various measures have been instituted to protect vulnerable social groups, such as direct transfers to enable them to access food. We are also assisting farmers with inputs, in particular fertilizers and seeds, to stimulate an increase in production”.
    Obando revealed that Peru had invested 94 million dollars to purchase urea, which is the most commonly used fertilizer in the country, stating that, “We have made a collective purchase of 73,000 tons. We are coordinating with regional and local governments to work out the distribution logistics”.
    He also said that Peru, with the assistance of IICA, was exploring the possibility of installing a phosphorus fertilizer plant
    According to Rognoni, Panama, a country that was also reeling from increased fertilizer prices and limited availability, had relaxed its importations requirements. The country also established a fund to stabilize fuel prices, which was made available to the agriculture sector.
    Jaramillio indicated that the World Bank viewed the situation with concern, as it affected not only consumers, but also producers. He warned that, “It would be extremely detrimental if the shortage of fertilizers and increased transportation costs cause food production to decline in the upcoming months, further aggravating the low availability in global markets”.
    “This meeting has provided a unique opportunity to learn how countries in the region are tackling this unprecedented situation. I see many similarities and some differences in the strategies the different countries have introduced. All of you understand that it is critical that we support the poor, which is the sector that bears the brunt of food price increases. We are particularly concerned that the increase in fertilizer prices may significantly impact and trigger a decline in global food production, causing the prices to increase further”.
    Manuel Otero felt that the measures implemented demonstrate that the countries have carefully reflected and devised strategies to address the situation. 
    As far as the consequences of the crisis are concerned, the IICA Director General indicated that is it likely that there will a shift in the balance between production of crops for export and crops that are essential for countries’ basic food baskets, as well as between production and the environment.
    “We must increase the food supply, obviously without disregarding the environment”, he said.
    Otero also stressed the importance of IICA’s recent appeal at the Summit of the Americas to establish a hemispheric partnership to tackle growing food insecurity.
    In closing, the IICA Director General insisted that, “We must join forces and strengthen our role as guarantors of global food and environmental security. In these times of crisis, we must stimulate dialogue and a search for consensus, so that we can launch coordinated actions that will allow us to overcome this crisis – a source of both threats and some opportunities. At the recent Summit of the Americas, we proposed the need to develop a hemispheric partnership, which would see us working together to tackle this crisis and strengthen our role as guarantors of food and environmental security. We also indicated that it is imperative that we introduce adequate financing to assist our farmers to deal with the cost increases resulting from the spike in energy and fertilizer prices. We have an important task ahead to reduce our excessive dependence on imported fertilizers, which in Argentina account for 70% and in Brazil, even more. Another issue is the matter of bureaucratic red tape that all the countries are trying to reduce and that is a positive thing”.






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