The Agricultural Sector Calls for Economic Policy Change to Prevent Shortages | El agro pide cambio en la política económica y evitar desabastecimiento

By El Diario:

  • The shortage of dollars will persist due to the Central Bank of Bolivia’s prioritization of fuel subsidies and external debt payments.
Confeagro’s Board of Directors

The government, instead of addressing issues affecting the national economy, such as the shortage of dollars and fuel, is moving in the opposite direction by hindering production, exports, and all activities in the production chains. These actions put the future supply of various products at risk, according to a statement from the National Agricultural Confederation (Confeagro).

The new president of the Eastern Agricultural Chamber (CAO), Klaus Frerking Adad, stated that the sector is experiencing difficult times due to unclear regulations for producers.

He criticized the export restrictions, noting that last year they targeted oil, now beef, and soon soybean grain. Additionally, the Seventh Provision of the 2025 General State Budget (PGE) has been described as a confiscatory measure that creates legal uncertainty.

“Now, the Seventh Provision does not provide the legal certainty the agricultural sector needs to continue producing,”lamented Frerking. He added that one of his main challenges this term is to overcome the economic crisis affecting both the country and the agricultural sector due to the restrictive policies imposed by the government.

“We need clear rules to be transparent and produce,” emphasized the CAO president, noting that the agricultural sector has the capacity and speed to boost the national economy.

He called for support to ensure that producers continue to believe in farming, sustain food production for all Bolivians, and export surpluses to generate foreign currency.

Concerns

Meanwhile, Confeagro expressed deep concern over the continued deterioration of Bolivian families’ economic situation, without any government action to mitigate the crisis.

“More than 12 months ago, we saw a disproportionate rise in the prices of imported goods, creating an imbalance between household income and the increasing cost of supplies,” the statement read.

Jean Pierre, president of the Santa Cruz Chamber of Industry, Commerce, and Services (Cainco), recently blamed the government for the country’s current situation, stating that its policies are strangling the economy and private enterprise.

Dollar Shortage

The dollar shortage began in early 2023 when the Central Bank of Bolivia (BCB) announced it would sell the currency at the official exchange rate, triggering long lines of people seeking to purchase dollars.

However, the BCB itself caused the crisis and the emergence of a parallel market by setting a preferential exchange rate for exporters. Initially, transaction amounts were publicly disclosed, but recent figures remain unknown.

Additionally, last year, the national fuel market experienced shortages due to the lack of dollars. Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) attributed the problem to high tides at the Port of Arica, Chile, and previous blockades.

Nonetheless, long lines have returned to gas stations in recent weeks, accompanied by complaints about fuel quality.

Meanwhile, BCB President Edwin Rojas recently stated that transferring dollars into the financial system has been challenging since fuel subsidies remain the government’s priority.

Rising Prices

The inability to buy dollars at the official exchange rate of 6.97 bolivianos per dollar has led companies and individuals to turn to the parallel market, where the exchange rate exceeds 11 bolivianos per dollar.

Confeagro warns that “the unsustainable rise in production costs for producers and supply chain members” is driving up product prices.

They argue that these price increases stem from the ongoing dollar shortage, which remains unresolved. “Despite repeated complaints, the government remains indifferent and ignores the issue,” they stated.

Worse still, instead of addressing the problems affecting Bolivian families, the authorities impose measures that stifle production, exports, and the entire production chain—endangering future supply.

Examples include price bands, export restrictions, and the Seventh Additional Provision, which they demand be repealed immediately.

Given these concerns, “Bolivian agricultural producers, represented by Confeagro, call for a shift in economic management that recognizes the agricultural sector as a fundamental pillar of Bolivia’s economy. The current approach has led to the present crisis,” the statement concluded.

It is worth noting that non-traditional exports have surpassed gas sales to Brazil, and Bolivian food products have gained international market access. However, restrictive policies are stifling private sector initiatives.

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