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Category Archives: Latin America

Fungus Cripples Central America’s Coffee Growers

A feature story in this morning New York Times by Elisabeth Malkin explores the horrific social and economic costs associated with the coffee plant fungus epidemic now affecting much of  Central America. You’ll find the full story–along with a fascinating video—here. Extracts from the story follow:

SAN LUCAS TOLIMÁN, Guatemala — When coffee rust attacked the farms clinging to the volcanic slopes above this Mayan town, the disease was unsparing, reducing mountainside rows of coffee trees to lattices of gray twigs.During last year’s harvest, Román Lec, who grows coffee on a few acres here, lost half his crop. This year, he borrowed about $2,000 for fertilizer and fungicide to protect the plants, as he did last year. But the disease returned and he lost even more. A plant-choking fungus called coffee rust, or la roya, has swept across Central America, withering trees and slashing production everywhere. As exports have plunged over the last two years, the effects have rippled through the local economies.

Four million people in Central America and southern Mexico rely on coffee for their living, and coffee rust is a major threat. Photo credit: Janet Jarman for The New York Times

Four million people in Central America and southern Mexico rely on coffee for their living, and coffee rust is a major threat.
Photo credit:
Janet Jarman for The New York Times

Big farmers hire fewer workers to pick the ripe coffee cherries that enclose the beans. Smaller farmers go into debt and sell livestock or tools to make up for the lost income. Sales fall at local merchants. Teenagers leave school to work on the farm because their parents can no longer hire outside help. At the very end of the chain are the landless migrant workers who earn just a few dollars a day.

In Central America, the pain is acute. Four million people there and in southern Mexico rely on coffee for their living, according to the Inter-American Development Bank. Twenty percent of the half-million jobs in Guatemala directly tied to the crop have already disappeared, estimated Nils Leporowski, the president of Anacafé, the country’s coffee board.

The rust outbreak has pushed many families to the edge of survival.“Roya (the coffee plant rust)has exposed the depth of the social and economic problems in terms of people’s vulnerability to the market and to climate change,” said Peter Loach, the Guatemala director of Mercy Corps, an aid agency. “What makes it different and complicated is that it’s a slow-onset natural disaster over two to three years.”

A coffee buyer waits to buy from pickers near   Lake Atitlan in Guatemala. Credit Janet Jarman for The New York Times

A coffee buyer waits to buy from pickers near Lake Atitlan in Guatemala.
Credit
Janet Jarman for The New York Times

 

 

 

Hugo Chavez’s Death and the US – Venezuela Oil Trade

With the recent death of Hugo Chavez, the controversial President of Venezuela, one of the many topics being discussed is whether the oil trade between that country and the U.S. might change. Before going further, let’s briefly review the situation:

  • Venezuela contains some of the largest oil and natural gas reserves in the world, and the country consistently ranks as one of the top suppliers of oil to the U.S. On a global scale Venezuela ranks as the 8th largest oil exporter.
  • More information on Venezuela’s fossil fuel resources is found here, on the U.S. Energy Information Administration website.

To move on, several national newspapers carry articles today on the topic of possible changes to the U.S. oil trade. Here are some choice quotes on that topic from the Washington Post (full artile is here. Washington Post graphic on Venezuela oil here.

Map- Venezuela's oil industry.001

Five years ago, a full-page ad blasting Exxon Mobil appeared in the Venezuelan newspaper Ultimas Noticias. Drawings of drops of oil went from black at the top of the page to red at the bottom. “Exxon turns oil into blood,” the bold-face text declared. Addressing “Exxtranjero” — the Spanish word for foreigner, with an extra “x” — it used a slogan from the Spanish Civil War that roughly translates as “you will not pass.”

The ad summed up the combative relationship the late Venezuelan leader Hugo Chavez had with some international oil companies and how he used his country’s vast oil riches as a political tool and weapon. Abroad, he pushed for crude prices of $100 a barrel. At home, subsidies have kept fuel prices down around 8 cents a gallon

Few analysts expect much change from his vice president and potential successor, Nicolas Maduro, who would need to bolster his domestic base

While condemning the United States and wooing countries such as Russia and Iran, Chavez still relied heavily on U.S. Gulf Coast refineries that were among the few capable of handling Venezuela’s thick, low-quality crude oil. About half of Venezuela’s crude ends up in the United States. But if the Keystone XL pipeline is built, similar-quality crude from Canada’s oil sands could push out Venezuelan petroleum.

“I think Chavez will be remembered for politicizing a once professional national oil company and managing to increase control but decrease production, miss the [liquefied natural gas] boom, and open the U.S. refining sector for Canadian oil,” Goldwyn said. Referring to Canada’s rival oil industry center, Goldwyn said, “He should be a hero in Calgary.”

The firm estimated that Venezuela shipped around 200,000 barrels a day to Caribbean and Central American countries in 2012 and 115,000 barrels a day to Cuba. In addition, Venezuela is sending more oil to China — about half a million barrels a day, according to the Eurasia Group — in part to meet its heavy interest payments on debt held by China.

Few analysts expect change in the Chavez oil policies soon.

We’ll post more on this topic soon.

 
 

As Biofuel Demand Grows, So Do Guatemala’s Hunger Pangs

A very informative and important article in this morning’s New York Times about how the increasing use of biofuels (mainly ethanol) in developed countries (mainly the U.S, and Europe) can cause hardships in developing countries by driving up food prices. Read the complete NYT article here.

Here are some choice extracts from the article:

“Recent laws in the United States and Europe that mandate the increasing use of biofuel in cars have had far-flung ripple effects, economists say, as land once devoted to growing food for humans is now sometimes more profitably used for churning out vehicle fuel.

In a globalized world, the expansion of the biofuels industry has contributed to spikes in food prices and a shortage of land for food-based agriculture in poor corners of Asia, Africa and Latin America because the raw material is grown wherever it is cheapest.

Nowhere, perhaps, is that squeeze more obvious than in Guatemala, which is “getting hit from both sides of the Atlantic,” in its fields and at its markets, said Timothy Wise, a Tufts University development expert who is studying the problem globally with Actionaid, a policy group based in Washington that focuses on poverty.

With its corn-based diet and proximity to the United States, Central America has long been vulnerable to economic riptides related to the United States’ corn policy. Now that the United States is using 40 percent of its crop to make biofuel, it is not surprising that tortilla prices have doubled in Guatemala, which imports nearly half of its corn.”

bull-guatemala2-popup

Sugar cane is one of the main sources of biofuel, and, as a demand increase in the US and Europe for biofuel to reduce auto emissions, the planting of sugar cane increases. But often at a cost of local food supplies, such as corn. Which is the case in Guatemala. (NY Times photo)

 
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Posted by on January 6, 2013 in Latin America