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Viewing cable 08PORTOFSPAIN185, RISING FOOD PRICES PROVOKE POLITICAL AND PUBLIC CONCERN

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Reference ID Created Released Classification Origin
08PORTOFSPAIN185 2008-04-18 18:24 2011-08-26 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Port Of Spain
VZCZCXRO2202
PP RUEHGR
DE RUEHSP #0185/01 1091824
ZNR UUUUU ZZH
P 181824Z APR 08
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC PRIORITY 9116
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHRC/AMEMBASSY ATO CARIBBEAN
UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000185 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/EPSC, WHA/CAR, EBB/TPP AND INR/IAA 
 
E.O. 12958: N/A 
TAGS: EAGR PGOV ECON EFIN ETRD ECIN TD
SUBJECT: RISING FOOD PRICES PROVOKE POLITICAL AND PUBLIC CONCERN 
 
Ref: 07 POS 278 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 
 
1. (SBU) SUMMARY: Against the backdrop of rising food prices and 
shortages, the GOTT is under pressure to address the "food crisis." 
The spike in prices, now a staple of headline writers, is straining 
low and middle income families.  The opposition asserts government 
neglect of agriculture is the main culprit, but the GOTT blames 
global supply and demand and factors such as biofuel growth. 
Seeking to deflect some of the political heat, the Prime Minister 
and other GOTT leaders are increasingly speaking out on the issue 
and raising it in CARICOM fora.  Even if the "crisis" subsides, the 
GOTT may insist on its inclusion in Summit of the Americas 
documents.  END SUMMARY. 
 
2. (SBU) Soaring food prices, flour and rice shortages, and isolated 
looting have pushed food security and affordability to the top of 
the political agenda, now rivaled only by concerns over rampant 
crime. In a nationally televised address April 2, Prime Minister 
Patrick Manning cited climate change, the biofuel growth, and 
"increasing demand as economies grow in the East" as fueling price 
increases.  While the most recent Central Bank figures estimate 
year-on-year inflation to be 9.4% for February 2008, food prices 
increased by 18.8%, with fruits, milk, cheese, and egg prices 
spiking more than 30%.  On the heels of nationwide flour shortages, 
the country's major flourmill also announced price increases ranging 
from 8% to 39% effective April 1. 
 
3. (SBU) Food price inflation has been a serious issue for the GOTT 
for more than a year.  In August 2007, it convened a "national 
consultation" on food prices, after which it highlighted several 
initiatives, including a joint agricultural project with Cuba to 
boost local food production (reftel) that reportedly will get under 
way within a month.  Since these consultations, the initiatives have 
largely disappeared or been delayed, raising public ire. 
 
4. (SBU) Faced with mounting criticism over the lack of progress, 
Manning outlined the government's comprehensive plan to address food 
prices on April 2.  It includes "increased production of food 
through the creation of seven thousand new farms from the lands of 
the former Caroni 1975 Ltd, and the establishment of sixteen farms 
... for large scale production of food for both local consumption 
and export" as well as a greenhouse demonstration project led by PCS 
Nitrogen.  [NOTE: Caroni ceased operations in 2004.  Since that 
time, the GOTT has promised to develop these once sugar lands for 
agricultural purposes and distribute them to the company's former 
workers. END NOTE] 
 
5. (U) The GOTT is also working with CARICOM nations to reduce food 
prices.  At a recent meeting in Barbados, regional leaders agreed to 
decrease or remove the common external tariff (CET) on a range of 
food imports.  There are also plans to develop large tracts of land 
in Guyana under the Jagdeo Initiative, and a GOTT-funded feasibility 
study for expanding regional ferry service to decrease 
transportation costs in the southern Caribbean. 
 
6. (SBU) While the PM blames external forces for rising prices, UNC 
opposition leader Basdeo Panday has criticized the GOTT for 
neglecting agriculture.  Specifically, he has highlighted the GOTT's 
allocation of potential agricultural lands for residential 
development as well as the GOTT's failure to convert fallow 
sugarcane fields into farmlands.  Panday and others, including local 
business contacts, point to the GOTT's inability to address 
inefficiencies at the nation's port as well as inadequacies in the 
local transportation network.  For their part, local rice farmers 
recently criticized the GOTT's "make-work" employment programs for 
attracting unskilled labor away from agriculture and its alleged 
favoritism towards industry as undermining the viability of 
agriculture. 
 
7. (SBU) In a discussion on the food situation, John Spence, a 
retired University of the West Indies botany professor, told us that 
he does not believe the GOTT's proposals will help ameliorate the 
current problem.  Spence criticized the lack of transparency in GOTT 
decision-making on agriculture and labeled its thrust short sighted 
and unsystematic.  Unsurprisingly, he expects the GOTT strategy will 
fail. 
 
8. (SBU) COMMENT: Public outcry over the rising cost of food now 
rivals crime as the main political headache for the GOTT.  Critics 
charge that its alleged slowness to address the problem stems, in 
part, from the historical proclivity of some agricultural areas to 
vote with the opposition.  This "political blindness" may be 
aggravated by the ruling PNM's vision to make T&T a first world 
state by 2020 -agriculture fits less well in this vision than the 
tall buildings going up along the capital's waterfront. 
 
9. (SBU) Nonetheless, the problem is now too large to ignore, at 
 
PORT OF SP 00000185  002 OF 002 
 
 
least on a political level. Manning felt compelled, for example, to 
again comment on April 17, telling reporters the GOTT would not 
subsidize food and that Consumer Affairs Minister Peter Taylor would 
soon explain government food plans.  The relative prosperity of T&T 
does make price increases manageable for many, but it also 
disproportionately impacts those in society's lower rungs, 
especially when combined with announced increases in electricity and 
water rates and the government's decision to maintain the value 
added tax on some food products.  While the rioting that has hit 
some countries has not been seen here, there have been a couple of 
food trucks looted, though in an area where the sacking of stopped 
vehicles in not uncommon.  We do not expect this issue to disappear, 
suggesting that the GOTT will raise food security, biofuels and 
related issues in discussions leading up to the Summit of the 
Americas.  END COMMENT 
 
AUSTIN