2024-07-17 21:27:26
El Salvador’s President Nayib Bukele announced Tuesday that he will suspend tariffs on imported basic food products for ten years, seeking to mitigate price increases, but the measure raised criticism from producers and economists.
The measures against price increases appear to be a new crusade by Bukele after pacifying the country with a “war” against gangs that began in March 2022, but his new initiative generated controversy because it would encourage food imports to the detriment of national production.
«Hoy [martes]I will send a proposal [al Congreso] “to suspend tariffs on all products in the expanded basic basket, as well as on 70 other food products, for a period of ten years,” Bukele reported on the X network.
– Ineffective measure? –
“Any initiative that tends to generate a benefit for the population, especially now with the rise in prices of basic goods, is important and is supported,” Ramón Villalta, director of the NGO Social Initiative for Democracy, told AFP.
However, independent economist Rafael Lemus, a critic of Bukele, said the measure would be “ineffective” since most foods do not pay import tariffs.
“Ineffective measure, most have a 0% tariff rate,” wrote Lemus in X, also stating that Bukele “encourages importing versus producing locally.”
– «It puts us at a disadvantage» –
According to official data, El Salvador imports 90% of its legumes, vegetables and fruits, as well as a large part of its cereals, oils and milk.
“The solution is to stimulate national production, only in this way will we guarantee price stabilization in the case of vegetables and legumes,” Luis Treminio, president of the Salvadoran Chamber of Small and Medium Agricultural Producers (Campo), told AFP.
According to Treminio, Campo has unsuccessfully proposed for two years to eliminate the value-added tax (VAT, 13%) on agricultural inputs to “encourage” domestic production, in addition to subsidizing “subsistence agriculture.”
Removing tariffs on certain foods “instead of promoting food sovereignty, is encouraging imports and that puts us at a disadvantage,” Treminio said.
– Supermarket inspections –
Last week, authorities began inspections in supermarket chains after Bukele ordered a crackdown on corporate “mafias” due to rising food prices. Some products, according to the Consumer Protection Agency, have accumulated increases of up to 40% in one year.
This one requested information from the six main supermarket chains about price increases.
Bukele also ordered an investigation into “unjustified” price increases on insecticides and repellents in pharmacies, hardware stores and supermarkets, amid a dengue outbreak that has killed four children.
In addition, the president opened mobile agricultural markets to promote direct sales and avoid intermediaries in an attempt to contain price increases.
According to ECLAC, 29% of the 6.5 million Salvadorans living in the country are poor, and year-on-year inflation was 1.48% in June.
The cost of the basic food basket per family, according to the Central Reserve Bank, is 256.56 dollars per month, compared to a stagnant minimum wage of 243 dollars in the agricultural sector, 359 in the maquila sector and 365 in commerce and industry.
In a radio and television broadcast on July 5, Bukele urged “importers, wholesalers, distributors and marketers of food” to stop “the abuses.”
“Stop abusing the Salvadoran people” [con los precios] or not to complain later,” he said then.
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© Agence France-Presse
