agriculture

Food plan gets tepid response

Producers of milk and rice say the plan to lower consumer prices doesn’t go far enough.

Production costs for producers have risen $200 in the last month, mostly due to higher oil prices.

LA PRENSA

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When President Martín Torrijos announced the launching of the Agrocompita program a few days ago, some domestic producers questioned whether the plan would succeed in reducing production costs as intended.

Alexander Araúz, president of the Asociación de Productores de Arroz de Chiriquí (Apach), said that production costs have been increasing steadily recently because of the high cost of fuel. While it took 10 years for production costs to increase $200 per hectare (from 1990 to 2000), that cost has almost doubled since then to $1,900 a hectare.

The increase from March to April of this year alone was more than $200.

"All the petroleum products that we use in the agricultural sector are not produced in Panama," Araúz said.

Farmers say that to pass on the cost to the consumer, they would have to start charging much more for their product.

The same is true for milk producers.

Belisario Contreras, president of the board of directors of the Cooperativa de Leche de Panama, said that the production cost for a liter of milk is now 50 cents, whereas it was 25 cents when oil was $40 a barrel.

"Everything has increased -- corn, fertilizer and benefits for workers," Contreras said.

For the problems facing producers, the government has prepared a "recipe" for helping them and also lowering food costs for consumers.

With the Agrocompita program, "the producer will get better pricing, thereby increasing their productivity and thereby benefitting the consumer," said the Ministro de Desarrollo Agropecuario, Guillermo Salazar.

Araúz, meanwhile, recommended that the government bear in mind that the only way to increase production is "to incentivize producers," and he thinks it will take more than the Agrocompita benefits to do that.

Contreras said one way to encourage farmers to produce more milk would be to require processors to share their profits with them.

Another way to lower consumer prices would be to increase efficiency. According to the International Rice Research Institute, Panama has one of the lowest levels of productivity in the world. While the world average is six tons of rice per hectare, Panama produces just 4.5 tons per hectare, much lower than Colombia (5.3), though higher than Costa Rica (3.1).