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Monday, September 22 2014 @ 08:18 PM EDT

Basic Food Costs Continue to Rise in Panama

Food & Drink By Cindy Calderón for the Panama America - Paradox. The prices for most agricultural products continue to go down according to the Institute of Agricultural Marketing. But the overall cost of the "canasta basica" (basic food basket) continues to rise. At the moment the "canasta basica" costs $243.29 on average, although in some parts of town such as San Miguelito it can cost as much as $248.22. (Note: In Panama they keep track of food inflation using this "canasta basica" index. There is a clearly defined list of goods considered to be the essential monthly grocery list for a family of four, and government officials closely track the rise and fall of those food items as a kind of home-grown inflation index.) (more)

Editor's Comment: Prediction - This issue of the continuing effect of inflation on basic food prices is probably going to turn into the most important issue facing politicians in the upcoming national elections in May 2009. Most of these inflationary pressures are coming into Panama due to external realities, and the only thing local politicians can due to ease the pain is to increase the minimum wage and continue to apply subsidies on things like fuel. They might as well kick in a minimum wage increase now before the protests and demonstrations start - to be proactive rather than reactive. And I predict this issue will replace internal safety and security as the #1 issue on people's minds between now and the next election.

(Article Continues)

At this price the "canasta basica" is only $51.78 below minimum wage, currently at about $300.00. Just in the last month of March the goods that increased the most in price were a half-gallon of vegetable oil up .29 cents, apples up .03 cents each, and bread up .04 cents. Other products increasing in price were fish (corvina) up .23 cents per pound and ground beef up .12 cents per pound according to the most recent report from the Consumer Protection Authority. As if that were not enough, last week bread went up .05 cents due to the rising costs of flour.

The prices for some agricultural products are also rising, in spite of a report from the Institute of Agricultural Marketing indicates that the majority of these products have gone down in price at the Central Agricultural Market. According to the United Nations Organization for Agriculture Nutrition, most of the agricultural products used to create bio-fuels can also be used to feed people which could cause indirect repercussions on food security.

The FAO indicates there is a good potential in Latin American and the Caribbean for the production of bio fuels, "but at the same time we can see how this might threaten the nutritional security of its population." It maintains that the rapid technological change in the biofuels sector makes it difficult to anticipate its impacts on nutritional security. "The intensity of its positive or negative effects will depend on the scale and speed of the change, of the types of productive systems considered, on the structures of the product markets and energy, and on the decisions taken in the subjects of agricultural, power, environmental and commercial policies", added the FAO.

ALIMENTOS. En algunos lugares del país ya alcanza los 248.22 dólares Precio de la canasta básica se acerca al salario mínimo

Con un salario mínimo de 300 dólares, miles de panameños tienen que hacer malabares para poder cumplir con las necesidades básicas de alimentación, vestido y transporte, entre otros

Cindy Calderón PA-DIGITAL

Paradoja. Los precios al por mayor de los productos agrícolas continúan bajando, según el Instituto de Mercadeo Agropecuario. El costo de la canasta básica de alimentos continúa en ascenso. Actualmente su precio se ubica en unos 243.29 dólares, aunque en lugares como el distrito de San Miguelito alcanza los 248.22 dólares.

Con este precio la canasta básica de alimentos se ubica a tan solo 51.78 dólares del salario mínimo, que es de unos 300 dólares.

Tan solo en marzo pasado los productos que más contribuyeron al incremento de la canasta básica fueron el medio galón de aceite vegetal que aumentó en 29 centésimos, las manzanas con un alza de 3 centésimos por unidad y el pan molde en 4 centésimos.

Otros productos que subieron de precio fueron la corvina en 23 centésimos la libra y la carne molida en 12 centésimos, de acuerdo con el último informe de la Autoridad de Protección y Asuntos del Consumidor.

Por si fuera poco, la semana pasada el pan elevó su precio en 5 centésimos, debido al alza de la harina.

En esta ya frecuente subida, los productos agrícolas también han repuntado, pese a que un reporte del Instituto de Mercadeo Agropecuario indica que en su mayoría los precios de estos han bajado en el Mercado Agrícola Central (ver tabla).

Biocombustibles.

Según la Organización de las Naciones Unidas para la Agricultura y la Alimentación (FAO), la mayoría de los cultivos agrícolas utilizados actualmente en la producción de biocombustibles también pueden ser utilizados para la alimentación, lo que podría ocasionar repercusiones directas en la seguridad alimentaria.

La FAO señala que la región de América Latina y el Caribe tiene un potencial de producción de biocombustibles, "pero al mismo tiempo puede ver amenazada la seguridad alimentaria de su población". Sostiene que el rápido cambio tecnológico en el sector de la bioenergía dificulta prever sus impactos en la seguridad alimentaria.

"La intensidad de sus efectos positivos o negativos dependerá de la escala y velocidad del cambio, del tipo de sistema productivo que se considere, de la estructura de los mercados de productos y energía, y de las decisiones en materia de políticas agrícolas, energéticas, ambientales y comerciales", aduce la FAO.

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Basic Food Costs Continue to Rise in Panama
Authored by: Anonymous on Monday, April 07 2008 @ 07:57 AM EDT

Don,

As you observe, most cost of living increases are due to external forces, and there is little that can be done about those on a national level. There are, however, a few things which might help.

The new oil refinery may eventually help to reduce or at least stabilize fuel costs. Here in Chiriqui Province, new lotifications are springing up on what was once prime agricultural land. Steps to slow down the conversion of land from agricultural to residential use might help to stabilize the cost of food. Increased efficiency in food production could help as well. Although corn is a principal component of feed for dairy cows, there is little corn production here. Chiriqui Province has extraordinarily fertile soil, but much of it is used for grazing beef cattle. That is not a very efficient use. I don't have any real numbers, but suspect that some of the land used for grazing beef cattle could support substantially more cows were the land used for grain production to feed them. In a recent article, you noted that many small bakeries have had to cease business due to increases in the cost of flour. Use of some of our very fertile land to grow wheat, to be milled into flour, might help stabilize or even lower the cost of bread.

Of course, there will be mounting pressures to increase the minimum wage. Whether doing so will ameliorate the problem is a different matter. A minimum wage increase might be politically expedient, and might even help a little in the short run; unfortunately, it would almost certainly lead to more inflation, and loss of jobs. Some of the bakeries left only marginally still in business due to increases in the cost of flour would probably fail due to the increase in labor costs. The same is doubtless true in other sectors.

More fuel subsidies would be great too, in the short run. Unfortunately, the money would have to come from somewhere, and the tax base is the obvious source. Ultimately, this would exacerbate inflation and keep the cycle going.

Inflation is bad, and there are only a few things which can be done on a national level to minimize it. Pavlovian responses which are likely to make matters only worse are not the answer.

Dan Miller