In Chirretzaaj, a community of 110 families four hours north of Guatemala City, Gregoria Cuz is making smaller tortillas to stretch her family’s food budget. The 26-year-old mother of three was confronted this year with a spike in the price of corn and beans. Speaking through a translator in her native Q’eqchi’ language, she told me, “The things we eat every day—we don’t make enough to pay for it all.”
The plight of Cuz and her neighbors in this village of dirt roads and precarious tin-roof homes in Guatemala’s Alta Verapaz department is emblematic of the country’s food security challenge.
Despite its resources, including rich agricultural land, Guatemala suffers the highest malnutrition rate among Latin American and Caribbean nations, and the fourth highest rate in the world, according to the World Food Programme.
“There are days when there is work for my husband and days when there isn’t,” said the soft-spoken Cuz, who shared her woes while an infant lay swaddled on her lap.
Cuz farms maize with her husband on a 226-square-foot (21-square-meter) plot of land, to which the pair does not yet have title. They aren’t able to produce enough corn to take to the market, which means Cuz’ husband tries to find work as a day laborer. On a good day he makes 75 quetzales ($9.63) moving crates at the open market in Coban, a regional commercial hub about a half-hour away by bus.
A little over a year ago, some relief came for Cuz in the form of food aid from Mercy Corps, a U.S.-based international relief organization partnering with the U.S. Agency for International Development (USAID) in Guatemala.
But that in itself underscores the predicament of Guatemala’s largely indigenous rural communities. As the country’s open economic market makes it vulnerable to the wild swings in international food prices, the nation’s poorest people are increasingly dependent on help from foreign aid agencies for their survival.
A Complex Problem
While Guatemala has achieved relative economic and political stability in the years since its bloody civil war ended in 1996, per capita income has been slow to increase. According to the Guatemalan central bank, gross domestic product expanded, on average, just 3.36 percent during the past decade—not fast enough to meaningfully raise living standards for the 70 percent of the population that lives in poverty.
Guatemala’s sluggish economy and persistent poverty are leading causes of its high malnutrition rates, but the entire picture is more complex.
The country is also susceptible to tropical storms and earthquakes that periodically wipe out farms and destroy roads. Despite abundant fertile land, food production is constrained by fragmentation and inefficiency within the agricultural industry. For example, more than 21 indigenous languages are spoken in thousands of isolated, rural communities across Guatemala, making it difficult for farmers in one community to communicate with farmers in another. Furthermore, the agricultural sector lacks adequate capital, technology and scale to furnish all of the country’s dietary needs. The country is thus forced to rely on imports simply to meet demand for staples.
On top of this, traditional indigenous diets lack the nutrients children need to develop, said Carlos Cazali, Guatemala’s secretary of food and nutritional security. “When you see that there’s a part of society that gets nourishment almost exclusively from these products, that’s an alert for state institutions, because you can’t meet caloric and protein requirements,” Cazali said in an interview at his office in Guatemala City. Guatemalans’ basic diet consists of corn, beans, sugar, and some spices. Even then, poor families in the country’s vast rural areas may eat only one or two meals a day, and in the most meager times may have access only to corn.
Ingrained cultural norms and poor education can aggravate the problem. Pregnant mothers in some rural communities feel obliged to eat less than their husbands, and parents often serve coffee to toddlers. Moreover, what little money families earn is often diverted to alcohol—the sight of young, unemployed men stumbling home drunk is common in the countryside.
It’s a bleak picture with tragic consequences. About half of all children under five nationally suffer from chronic undernutrition, according to the World Food Programme. In the Highlands, where most of Guatemala’s indigenous population lives, the problem is worse: an estimated 70 percent of children under five are undernourished.
Globalization’s Negative Effects
When food prices spike, as they have in the past year, Guatemala’s vulnerabilities become even more evident.
The international price of wheat and yellow corn, caused by a decline in production due to poor weather conditions, jumped significantly earlier this year. (Chicago corn futures were up 92 percent in July from a year earlier). Domestically, white corn production began to decline in November 2010, which also drove up the domestic price of corn.
As a result, the cost of bread and tortillas rose, and Guatemalans were forced to tighten their belts further. Some 61 percent of those responding to a Globe-
Scan survey conducted in April said they had changed their diet over the past two years, and 48 percent stopped eating certain foods because they became too expensive.
Consumers aren’t likely to get any relief in the form of cheaper credit. In May 2011, Guatemala’s central bank reported that, driven largely by increases in food prices and transportation costs, inflation had jumped to 5.76 percent—near the top of its target band. In response, policymakers raised the benchmark interest rate twice, to 5 percent, making it harder to secure credit.
Unlike agricultural powerhouses such as Argentina and Brazil and oil exporters like Venezuela, which have benefited from a surge in commodity prices over the past decade, Guatemala relies on food and gasoline imports. The commodities boom has hurt the tiny economies of Central America even as it has helped commodities exporters.
Tapping the potential of Guatemala’s agricultural sector, Cazali said, will require significant consolidation and investment. But that’s a difficult task to achieve, partly because piecemeal solutions implemented over past decades by the government and foreign aid agencies have created distortions in the economy.
For example, the government and World Food Programme import vast quantities of corn and distribute it for free. While this offers a lifeline for the poor, it isn’t enough to cover shortages and often undermines the incentive for local production. “It becomes unattractive to produce, because there’s always going to be someone that provides food,” Cazali explained. “The public dilemma is, up to what point is it important to maintain these measures?”
The answer, he says, “is simple: they have to be maintained. But you have to review the intervention so that you create a sustainable situation, and that will require an initiative to modernize agriculture in Guatemala.”
While poverty is concentrated in rural areas, the picture in Guatemala’s cities is also challenging. At La Terminal, a wholesale food market in Guatemala City, thousands of vendors set up shop before sunrise in a chaotic district off one of the capital’s main boulevards.
This is where a significant portion of the country’s produce arrives in the city, and buyers come early to purchase fruits, vegetables, beans, eggs, and meat to resell at street markets elsewhere in the city. While most of the produce appears to be high-quality, the conditions are far from sanitary. Flies swarm around the food stalls, stray dogs forage for scraps, and passing buses and trucks belch huge clouds of black smoke.
Everyone says prices are going up—and fast.
“People are buying less, because it’s very expensive, and we’ve had to change the way we make tortillas,” said Christina Rodriguez, who grows corn on a plot of land in the department of Sacatepéquez, just west of the capital, and comes periodically to La Terminal to make tortillas at a kiosk.
It isn’t just food prices that are rising. Inputs are also more expensive. The price of fertilizer rose 200 percent in the past year, and the cost for the gas tanks Rodriguez uses to cook at her street stall doubled. Rodriguez has passed on those price increases to customers. Last year she sold six large tortillas for one quetzal ($0.13), but this year she reduced it to four smaller tortillas per quetzal.
These are real-world examples of how international food markets can have magnified impacts on small economies, said Oscar Monterroso, head of economic research at Guatemala’s central bank.
Corn provides a good case study. The country produces a significant amount of white corn used to make tortillas, but imports yellow corn used for animal feed. “If the price of corn on the international markets rises, that causes the price of feed to rise, which then causes the price of chicken, pork and eggs to rise,” Monterrosso said in an interview. “Those are all important products in the Guatemalan consumer price index. In small open economies like Guatemala’s, the impact of these shocks starts to affect other prices—the second-round effect. So you see increases in the price of certain products that aren’t necessarily directly affected by oil, corn and wheat.”
Is Help on the Way?
Back in Chirretzaaj, help is trickling in. In 2008, President Álvaro Colom launched a conditional cash transfer program called Mi Familia Progresa, in which the government pays 300 quetzales ($38) a month to families that enroll their children in school and take them to regular medical examinations. By the end of 2010 the program had disbursed $135 million in health care, nutrition and education transfers to 814,625 families nationwide.
But the system has problems. Recipients in Chirretzaaj report that payments are too small to make a real difference, and can fall months behind. Opposition politicians complain that, in practice, the program has been corrupt and politicized. Colom delegated leadership of the program to his wife, Sandra Torres, who earlier this year launched an unsuccessful bid to run for president. Critics say it provided her with a platform to curry favor with poor voters. But even the first-round winner in the 2011 presidential election, retired general Otto Pérez Molina, said during his campaign that he would improve the program, not dismantle it.
Aside from the transfer program, the Colom government developed a four-year food security initiative, which began in 2009. The National Food Security and Nutrition Strategic Plan aims to formulate solutions to boost domestic agricultural output, increase the availability of food to poor citizens and improve nutrition education, among other goals. The program calls for sweeping, nationwide initiatives, including food production guarantees—focusing especially on grain—and developing food storage and warehousing infrastructure.
In addition, it identifies a need for economic incentives to boost output of beans, corn and regional fruits and vegetables. The incentives include: technology transfers and technical assistance to farmers; targeted help for victims of natural disasters; increased income through work programs and proper disbursement of pension payments; lending programs; and improved nutritional education and upgrades to sanitary infrastructure, especially in rural areas.
The program also emphasizes greater coordination between government ministries and the numerous international aid groups and NGOs operating in the country.
Despite the Colom government’s lofty goals and measured success, the Guatemalan state lacks the resources to implement spending programs on a national scale. Tax collections as a percentage of GDP remain among the lowest in the Americas, limiting the government’s ability to reach the country’s most remote communities.
Chirretzaaj residents say they’ve felt a much stronger impact from NGOs and foreign aid agencies, such as Mercy Corps, whose Maternal-Child Diet Diversification Program (PROCOMIDA by its initials in Spanish) aims to prevent malnutrition. The $50-million initiative, launched in 2009, provides food and healthcare services to pregnant and lactating mothers and children under age two in four Alta Verapaz municipalities.
The market may also provide some relief this year. Corn prices have begun retreating from their summer highs, thanks in part to improved harvests in the U.S. and softer demand. But forecasts say it is unlikely prices will drop to the low levels of 2008.
Meanwhile, programs like PROCOMIDA have been life-changing for Guatemala’s hard-pressed families. Soyla Marina Rosales Chocooj, a 30-year-old mother of three, began receiving rice, beans, cooking oil, and a vitamin supplement for herself and her children last year. Rosales’ third child, Catherine Belinda, was born after the Mercy Corps program started, and weighed over a pound more at birth than her previous two children. “We’ve been through a lot of poverty, but you try to find a way to give your kids what they need, even if it’s not enough,” she said during a visit to her dirt-floor home.
Rosales and her husband, who previously worked as fare collectors on one of the converted American school buses that hurtle down Guatemala’s highways, grow corn and raise chickens on a small plot of land. “Before this [program], I would go to the market but I couldn’t buy everything,” Rosales said, as she proudly served fruit and sweet cream to the first foreign visitors she had ever hosted. “Sometimes I would have only enough for oil and rice. But now, it’s getting better for me.”