El Salvador’s Basic Food Basket Continues to Rise

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By LatAm Reports Editor

qOf the last four, it is the second five-year period in which its cost increased the most in its first 54 months. The rise of the present administration was more than twice that recorded, jointly, in the previous two.

The basic basket in El Salvador has increased by 27.02 per cent since Nayib Bukele took office in June 2019 until December 2023, the last month for which data are available. In four and a half years, it went from costing $202.37 to $257.06. A person today must allocate a quarter more of their salary for the most basic meal.

The increase in the present administration contrasts with that of its two predecessors, Mauricio Funes and Salvador Sánchez Cerén, where the basic basket grew by 3.1 % and 8.69 %, respectively, between the month they took office and December of the last full year in which they were in the chair. That is, the first 54 months of his term of office.

In the period of Nayib Bukele, the most elementary meal, which people with lower resources can access, increased at a rate twice as much as in the two periods of their predecessors together.

The meal only grew faster in the administration of Antonio Saca: taking into account a similar period (the first 54 months of its five-year period), it is found that, for the last president of ARENA, the increase of the basic basket was 38.12%. For that president, the big blow came just in its fourth year, in 2008, when food inflation was placed at a heavy 8.4 %.

Economist Rafael Lemus explains that that year in particular the country faced a triple crisis, represented, first, by a scandalous rise in oil prices due to conflicts in the Middle East. At that time, the state finances were extremely tied, as the government tried, without success, to alleviate the impact on the population by taking on widespread subsidies, including one at the electricity tariff, because, by that time, the contribution of fossil fuels in the energy matrix of El Salvador was even greater.

Second, it was a context of widespread food price inflation at regional level. Luis Treminio, president of the association of small farmers CAMPO, points out that there was also a shortage of products, such as beans, throughout Central America, because what he had to go looking for the grain to markets outside the continent.

The pound of beans came in at $1.75. It was a very hard blow, says Tremino. The third element of the 2008 escalation was the housing bubble crisis that began in the United States, but it radiated to everyone. Then, the local banks ran out of dollars, as their correspondents from abroad asked them for those funds. For this reason, they were unable to lend as much money as before to other actors in the economy and even interest rates rose.
“It was the perfect cocktail for the disaster,” Lemus says.

Mauricio Linares, an agronomist and deputy for ARENA, is critical of his party’s presidential efforts. According to him, the predecessors of Saca, Francisco Flores and Armando Calderón Sol, chose a policy in which the agricultural sector was abandoned, which had repercussions on the economy of Saca’s period being even less prepared.

He points out that in the period of that president some rescueable efforts were made, hence, even in that nefarious 2008, productions of fairly good foods, such as 88,000 kilograms of beef.

For the experts consulted, the periods of Mauricio Funes (2009-2014) and Salvador Sánchez Cerén (2014-2019) were quite lucky, as they did not have the burden of external economic conditions too complicated.

However, for Luis Treminio of CAMPO, these administrations had a little more political will to support the agricultural sector when the weather was wrong. For example, remember that in 2014 and 2015 there was a drought that caused many producers to lose their corn harvest.

At the beginning of that cycle, the Ministry of Agriculture and Livestock (MAG) had already delivered seeds through the agricultural package. After the droughts, he again gave them this support, which allowed those who lost, to reseed.

That’s how the crisis could be contained a little, because many got up. With the drought of this 2023, there was no such aid, as they did not deliver packages again after the losses, he says.

According to Treminio, in 2022, when some losses were reported due to storm Pilar, the opposite happened. The guild reached an agreement with the Minister of Agriculture and Livestock at the time, Enrique Parada, to deliver new packages.

And then they took it away to put the current minister. And we saw that the idea was to go and forget everything the previous one had done. And they took us and all Salvadorans to meet. Maybe if they had helped, prices wouldn’t have gone up so much, he says.

For this reason, Treminio is one of those who advocates the creation of a national Agricultural policy, which transcends individual officials and even governments. For him, there should be the creation of a strategic reserve, allowing the State to introduce grain in times of scarcity and thereby lower prices.

For Congressman Mauricio Linares, another point is the reactivation of irrigation districts, in particular the Lempa-Acahuapa, whose representatives arrived this week in the Legislative Assembly to ask that, from there, a hearing be intermedied with the head of the MAG, Escar Guardado, and explain their ideas. They claim that if they have support, they could grow up to 150,000 quintals of beans in the summer period.

The rest of the region
El Salvador is the only country in the region that does not have an Agricultural policy. Hence, 2023 has been closed as the country with the highest food inflation in Central America.

And since Bukele took office, El Salvador is the third nation of the isthmus to rise the most, in percentage terms, the price of its basic basket.

With 27.02 %, only Honduras (42.04 %) and Nicaragua (40.59 %) are surpassed. However, in all this we have to make a nuance, because that of El Salvador is the basic basket that includes the least products, with only 11 products in the city and 9 in the countryside.

The one in Honduras, on the other hand, consists of about thirty and includes non-alcoholic beverages. In the case of Nicaragua, basic necessities, such as soap, are listed, and there is even a section on costumes.

This article has been translated from the original which first appeared in El Salvador