Dealing with the "price crisis"

Nothing against adding more data to the debate (always a good idea), especially when it comes from a well-known source (it does), but it seems like a non-article to me. "Non" in the sense that I suspect the authors just strung together stuff they found on the web. I live in Honduras and am not sure what to make of the story. Much of it simply does not map to reality (a nice, sort of polite way of saying journalists should actually do research before they write articles).

I say that because: (1) It is hard to find non-Honduran rice in the country but, statistically, they import 83% of the rice they consume? Not likely; (2) This was triggered two decades ago ("a dependency triggered almost two decades ago when it adopted free-market policies pushed by the World Bank and other lenders) and for some bizarre reason never resulted in a price scandal until the last 10 months as select Honduran food growers are raking in the cash? No likely; (3) The problem was ripe for solution when they reluctantly removed the U.S. rice tariffs? Not likely (this particular U.S. foodstuff costs more than ever, not less than ever; when U.S. rice can be found, it usually costs double Honduran rice, and more importantly, costs triple what that same U.S. rice costs in the U.S. (Delmonte, Kraft, Smuckers, Hersheys, etc., etc., etc., can export to HN and sell for the same as suggested retail in the U.S., but none of the rice manufacturers can doe better than 300% increase? Seems unlikely); (4) If in 2008 you want to prove a current point using statistics, is it a good idea to focus on 1990-1994, but not stats from 1994-2006? Not likely; (5) Is it a good idea to focus on alleged inexpensive foodstuffs ("The trade barriers that helped the country meet more than 90 percent of domestic demand were dismantled under an agreement for a World Bank loan in September that year, allowing cheaper imports to flood the market"), if those foodstuffs cannot ever be found at the alleged cheaper prices? Not likely. The food that had come in, later came in, and is now coming in, is simply not cheaper (this can be confirmed by any number of supermarket and pulperia visits by anyone who can do basic math - and hopefully that does not rule out Bloomberg staff writers, but you never know...); (6) Is the number of farmers required for any particular product ("There now are 1,300 rice farmers in Honduras, compared with more than 20,000 in 1989, according to human rights group FIAN.") really the best measure of the demands/needs and/or revenues of that same product? Not likely (after all, is there too little or too much rice being grown in Honduras? There is no shortage of rice and the cheapest rice to be found is Honduran).

If a country were only able to import expensive food, then the article might make sense. The problem is that, in HN, imported food is not easy to find, and when it can be found it is not being sold at tariff-free prices, and there is no shortage of food anywhere in the country due to IL policies or any other thing, etc., etc., etc. I do not know the real cause or answer, and admit it. Maybe Honduran growers are somehow blocking comparable imports; maybe Hondurans are blocking or evading a governmental mechanism for state price controls; maybe Hondurans are bypassing the tariff-based price schemes and are after-import unilaterally pricing imports beyond the in-country product; maybe the problem could be solved by actually importing cheap U.S. rice and beans which would grossly undercut current prices; maybe Hondurans are importing pricey U.S. rice and repackaging it to appear as Honduran; maybe any number of things are true, but if large-scale things are as they appear to be, then the so-called "facts" of many news counts are not actually true which means they are not facts - and one cannot base any realistic account or conclusion on them.

In the end, markets are full of Honduran produce made or grown by Hondurans that most Hondurans can not afford, period, and the journalists have nothing to say regarding this fact; absolutely nothing. It is at least the 20th article I have seen this month, on the high cost of food, that manages not to ever list the cost of that food to the average person, per pound, per day, per family, per inflation, per % of daily salary, per anything, really. It is unfortunate, but the article doesn't really shed light on the biggest issues; one cannot write an article like this solely based from an office in Singapore or Bogota or D.C.

Right On

© John Lennon

the undependable power supply is strangling economic growth

-Doug

If you're not part of the solution, you're part of the precipitate

stopping muscles spasms or treating chronic pain, glaucoma, M.S., arthritis,..or just plain old depression ?

Would you rather people to take Prozac and Paxil ?

Get hooked on Oxycontin ?

or maybe a heart attack with Celebrex;

"This medicine can increase your risk of life-threatening heart or circulation problems, including heart attack or stroke. This risk will increase the longer you use Celebrex. Do not use this medicine just before or after having heart bypass surgery (also called coronary artery bypass graft, or CABG).

Seek emergency medical help if you have symptoms of heart or circulation problems, such as chest pain, weakness, shortness of breath, slurred speech, or problems with vision or balance."

Side effect of cannabis- munchies

Result over dose- fall asleep

Oh yeah, save us all from the Devil Weed with roots in hell.

-Doug

If you're not part of the solution, you're part of the precipitate

The CF lights were distributed for a really cheap price. I saw reps from one of the govt offices selling them in Centro Comerical Managua awhile ago.

It was all very up and up. You had to show ID and fill out a form in order to buy them. I think they were selling them that day to pensionados or people that have INSS cards. I know that I could not buy them because I had neither card.

I've also seen them for sale in the military supermarket for cheap.

All of Doug's points make a lot of sense. I even agree with the cannabis part (for medical reasons, I don't know how it applies to energy).

What is the reason that geothermal isn't the main source of energy here? With all these volcanoes, there is abundant geothermal right near the surface. Does Iceland have an embassy here? They've got it down to a science.

With the price of energy as high as it is now, a lot of alternative sources are now profitable. While there are hands extended for donations all over Nicaragua, is there anyone trying to implement geothermal on a for-profit basis?

Nicaragua had installed geothermal plants in the 1970's. the problem is that no upgrading has been done, and these plants are past their expiration date. Nicaragua could be like Iceland producing most of its power from geothermal. Unfortunately Ortega, being Chavez's minion is not interested, and the USA through its oil companies do not want countries to be self-sufficient. particularly those near foggy bottom....

tucker- this country has it all for alternative energy-volcanos for geo-thermal-sun for solar-wind for windmills and yes -legalize cannabis for export and hemp for paper, clothes, etc-work more on tourism-develope non-polluting industries-quit exporting until food prices are brought down-i heard they have discovered oil on the pacific coast-and yes i know many people receiving electricity illegally-and the most important stop government corruption-oh well- i guess it's ok to dream

It is true. Geothermal could provide most, if not all of the power Nicaragua needs, but produces just a small amount today. The government does not have the money, expertise, will, or all of the above to take on geothermal projects, while private investors have so far been reluctant to take on the risk of doing business in Nicaragua. There are presently two geothermal plants operating, at Momotombo and San Jacinto. Momotombo (operated by Ormat Geothermal) was designed to produce 70 MW, but is currently putting out about half of that for technical reasons. A small plant at San Jacinto (owned by Polaris Geothermal) is producing almost 10 MW at present, using wells that were drilled in the 1990s by the Russians. That plant was constructed in the last 5 years (not in the 70s), and an expansion to about 70MW is under way, including drilling new wells and building a new power plant. With a total national demand of about 450MW, another 70MW of base load generation will be significant, and save on imported fuel, which produces about 80% of the electricity in Nicaragua.

There are several other geothermal fields that are untouched, and more geothermal development by private investors will happen, provided developers are given a fair price for their electricity, and Nicaragua is perceived as a safe country to invest in. Most renewable energy sources, including geothermal, wind and hydro, involve large upfront costs, but low running costs, unlike oil fired generation which is the reverse. Therefore developers need assurance that that they will receive reasonable prices for at least 20 years, to pay back their considerable investment. They are less likely to make that investment where there is perceived to be an unstable government, corruption, political interference or a risk of nationalisation of assets such as electricity generating plant. Polaris must have made an informed decision, since they are investing in Nicaragua.

Phil