High Food Prices A Two-Edged Sword For Farmers For some farmers in Honduras, high food prices mean greater profits. But others can't afford the higher costs for fertilizer and pesticides, so they're cutting back on production.
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High Food Prices A Two-Edged Sword For Farmers

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High Food Prices A Two-Edged Sword For Farmers

High Food Prices A Two-Edged Sword For Farmers

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For many farmers in the developing world, their world has been turned upside down. The farmers used to complain about low prices, which made it hard to earn a living. They blamed rich countries where farm subsidies encouraged overproduction. Now grain prices have gone through the roof all over the world, and in the final part of our series on responses to the global food crisis, reporter Dan Charles raises the question: If low food prices are bad for third world farmers, are high prices good for them?

DAN CHARLES: The answer seems to be high prices are good for some farmers.

Mr. CARLOS ROBERTO NAVARRO (Farmer): (Through translator) I make about 10, 11, nine percent profit.

CHARLES: Carlos Roberto Navarro is showing off a newly planted bean field near the town of Moroceli, in Honduras. Navarro is reacting to the food crisis exactly as an economist would expect. He's growing more corn and beans.

Mr. NAVARRO: (Through translator) I've increased a lot. In the past, I planted about six acres. Now I'm planting 30.

CHARLES: Is that all related to the increase in prices?

Mr. NAVARRO: (Through translator) Yeah, because of the prices. Yeah.

CHARLES: But then I asked him, are other farmers here doing the same thing? What about the biggest group of Hondurans, the farmers with just a few acres of land in the hills? And Navarro shakes his head. They aren't making any money, he says. They never did, and they never will. That opinion is widely held, and many of the reasons are predictable. Arie Sanders, a Dutch economist who teaches at the leading agricultural university in Honduras, Zamorano, ticks off just a few of those reasons.

Dr. ARIE SANDERS (Economist, Zamorano): People don't have the management skills, don't have the credits. They don't have good land. They don't have good markets to sell their products.

CHARLES: When I asked small farmers directly, they blame the soaring costs of fertilizer and pesticides. Even subsistence farmers like Gregorio Diaz, near the town of Santa Cruz de Yojoa, rely on these chemicals.

Mr. GREGORIO DIAZ (Farmer): (Through translator) I have this ready to plant beans, all of it. I'll plant the beans, then we'll apply fungicide, insecticides, pesticides, because beans are very delicate.

CHARLES: Diaz says because those chemicals now cost so much, he's planting even less than he did last year, just three acres. It's too risky to spend more with no guarantee he'll earn it back. For all these reasons and then some, subsistence farmers like Diaz don't see a way to profit from high food prices. For them, farming isn't really even a business. The real reason they plant corn or beans or rice is so their families have something to eat. They get cash from other things, says economist Arie Sanders - from occasional jobs, or sometimes from relatives in the United States.

Mr. SANDERS: And that's the way that the small farmers survive. It's not by their own farm, but by off-farm employment.

CHARLES: And still, despite all that, experts on economic development are increasingly convinced that subsistence farmers can start to earn profits. In many countries, farming may be the most promising path out of poverty. Agriculture started attracting more interest a couple of years ago. In the past year, the food crisis shoved it into the spotlight. The Bill and Melinda Gates Foundation is spending close to a billion dollars helping African farmers get better seeds and cheaper fertilizer, and also helping them sell what they grow for a decent price. In Honduras, the U.S. funded Millennium Challenge Corporation is turning thousands of small farmers into vegetable growers. Marco Bogran is the program's deputy director.

Mr. MARCO BOGRAN (Deputy Director, Millennium Challenge Corporation): We deeply believe if we can get our farmers to connect to the market, they will, in fact, be capable of achieving growth - sustainable growth. And they will be capable of not being farmers anymore, but actually being agricultural entrepreneurs.

CHARLES: World Bank economists are also convinced that subsistence farmers can become commercial farmers. The bank says it's already happening in Uganda and Vietnam. But the recipe for this transformation has a long list of ingredients: decent roads are important, so are good seeds, fertilizer, irrigation and assistance in how to use that technology. Even the food crisis is helping. It's a two-edged sword causing great suffering, but for some poor farming communities, creating opportunities.

For NPR News, I'm Dan Charles.

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