Daily Archives: March 9, 2012

Bolivian government’s or market failures?

Current Bolivian government continues with indecision and has generated unnecessary production-side uncertainty, Pagina Siete reports:

Restrictions on the export of rice prepared by the Government, which led to the loss of markets, and the intervention of Emapa made that an over stocking of the product takes place, resulting in a reduction of the price, according to the producers of Santa Cruz.

As a result of this situation, that producers took seven oil wells in the province Santa Rosa del Sara and camp Adder in Yapacaní, both in Santa Cruz.

The Government called for the dialogue and the producers responded that they only speak in the conflict zone and a delegation of five Ministers.

[now they are looking after a meeting with current president himself, who is preparing a trip to advocate for coca chewing to the Vienna Convention, when there are priorities… what can anyone do?!]

The Executive Body banned the export, in order to supply the domestic market and with Emapa sought to curb speculation on the price to the consumer.

The Executive of the single Federation of workers peasants of the four provinces of the North, Florenio Orko, explained that the restriction on the export of grain led to collection centers saturation, they do not want to buy the product nor pay them a tiny price of ten, 15 to 20 dollars per bushel (200 kilos).

“We have old rice, 54,000 tons, and they are already beginning to reap, where are going to collect, who will buy?, we are going to have to sell to ten dollars;” or throw it in the streets to lose.”Other (producers) for the price of harvest they prefer to leave the grain in the field, we can not reach that point because we make a huge investment”, said Orko.

Page seven tried unsuccessfully, to have a counterpart in the ministries of Productive Development and Rural Development; however, the authorities were in meetings.

According to Orko, what is needed are markets for the product that is saved and that were lost after the export ban. Now that there is permission it is hard to resume them.

http://www.paginasiete.bo/2012-03-08/Economia/NoticiaPrincipal/8Eco01-080312.aspx

The big question is… will this government learn?? and if so, can they amend it soon enough for those producers not to loose their life’s savings? Remember what happened last year with corn producers, they were denied the exports, then they cut their production and imports had to be made to meet internal market demands…

We see rice producers invading gas wells and also having a negative impact on our hydrocarbon industry, let alone our heavy dependence on natural gas exports. While that borders anarchy, as the government does nothing to solve productivity, efficiency and effectiveness,  this cartoon from El Dia, March 1, 2012 portrays our reality. Where the circus manager is pushing/motivating the oil sector, which is seen as an old elephant due to lack of real investments to recover our standing in the regional market for our natural gas…