Food Crisis Opportunities

Behind the global food crisis there is a Titanic struggle among the petroleum countries and the big American agricultural corporations, explained the Doctor of Economy, Francisco Mayorga. “It is a struggle of big animals”, says Mayorga, paraphrasing the famous saying that was coined after he was incarcerated for the Banco del Café bankruptcy for which he spent two and a half years in Tipitapa prison.

China and India have unleashed a voracity for food in the World, shooting up demand to a current decrease in the food supply caused by droughts and plagues that have affected the agricultural production on a global level.

At the same time, signaled Mayorga, there is an enormous demand for biofuel due to relative scarcity in petroleum, “because although it is drilled and there might be refineries, the capacity of petroleum production in the world shall not be at the heights of the demand”.

As a consequence the race for biofuels has accelerated, headed by the American agricultural corporations, which have always been subsidized by their government, as have been those of Europe.

Historically, the governments of the United States and Europe bought the excesses of agricultural production and sold them to poor countries. This model has failed, sustains Mayorga. “This is the undoing of an inefficient agricultural model of production for the world because the agriculture companies have received subsidies from two hands: granting of incentives and buying their excess production”.

For this reason, a crossroads for the world has opened: all countries need to create incentives for the production of biofuels, but the poor countries lose capacity to be self-sustaining agriculturally.

Central America at the Top

While the rest of the Central American countries dedicate themselves to producing biofuels, they have reduced their capacity to produce food. This is the case with Nicaraguan beans, yearned for by El Salvador and Honduras, which now the government intends to sell in a nationalized manner. Only Nicaragua has idle lands to amplify its agricultural production, which the government intends to promote.

“I believe that this is an extraordinary opportunity for Nicaragua. The poorest of the poor Nicaraguans have been the farmers. And if the prices of food at a regional level are attractive, with these margins for gain they are going to be able to capitalize themselves, improve their technology, increase their investments, and depending on the politics of the government and the actions of the private sector, this could represent an opportunity to significantly diminish the levels of poverty in the country”, Validated Mayorga.

Toward a New Economic Model

Nicaragua has lived the last seventeen years thanks to the exportation of labor, the sending of remittances, international cooperation, foreign investment of factories, and a service economy that consumed the remittances sent for their compatriots, causing them to abandon the country in a true vicious circle of poverty.

“We already had, in the Samoza era, an agro export model with the hayday of cotton. It was very successful on the macro level but those that got the lion’s share were the owners of the big agricultural business groups, of the slaughterhouses, of the benefits of coffee, of the picking companies, of the pasteurizers, of the rice threshers, and of the engineers”, signaled Mayorga.

Neither the old agro exportation model nor the neoliberal model based on remittances, factories and privatizations, left sufficient progress, equality, and wealth in Nicaragua. “The country, inevitably, will return to being an agro exporter economy, which I see is a magnificent opportunity for Nicaragua, the monopolistic capitalism that we have had will convert itself into a democratic capitalism”.

The old agro exportation model concentrated investments on economic groups because they controlled the means of production. “Actually the possibility exists that the producers banded together. A good example of this are the producers of milk in Costa Rica who created an exemplar cooperative such as Dos Pinos, they amass their milk, process it, sell it in the internal market, and export it. It is a paradox that Nicaragua, being a great producer of milk, imports cheeses and even milk that comes from Costa Rica”, says Mayorga.

This is also the case with the producers of milk in Finland where many producers band together in the same cooperative and export their production to the European Union.

The Requirements

The credit production of short, medium, and long term is key to making this new economic model a reality, as well as the expansion of areas for production.

But the risk needs electric energy, qualifies Mayorga, which will be able to facilitate means of wind energy as in Holland and Denmark. But the energy sector is the true Achilles heels of the country, to the point that the factories are being abandoned, not only because as in Asia they encounter cheaper labor, rather there is a shortage of sufficient energy production.

The country needs to maximize its capacity of generating energy for possible risks and the agro industrial production, without the sword of Damocles of blackouts. Without this it would be impossible to take off, advertises Mayorga.

Albanisa and the risk of mega failure

In the judgment of Doctor Francisco Mayorga, the four hundred million dollars that he esteems for Venezuelan cooperation in 2008, capitalizing the agriculture sector and facilitating the development of the agro industry inside of a perspective of Democratic Capitalism would be able to be approved, and this can signify the possibility that Nicaragua prospers and the debt be paid.

“If the money is received and not invested in a productive manner, then these companies are not going to be able to pay it. What I underline is that there exists here the possibility of moving ourselves towards an equitable society, modern and prosperous”, he signaled.

In his book, edited by the Institute Albertus Magnus, he advertises that “Albanism seems to be viewed as a fountain of resources to support the development of new business groups that serve as catalytic elements of the country’s productive development”.

But Mayorga advertises that there is never surety that a business project might be successful, remembering the case of the businesses of Cornap- the majority of them bankrupt and broken- by which he notes “the failure of a megaproject is a mega failure, and can bind short term the solvency of Albanism”.

Mayorga sustains that much of these four hundred million are spent outside of the budget, not binding the state to acquire any public debt, but demanding that these funds be used to incentivize long term farming production.