Food for Profit

September 25, 2007

Malnutrition is the most serious health problem in the underdeveloped world. Of all people dying in the poor nations, more than 40 percent are children under five years of age. And most of these childhood deaths are caused by the interaction of malnutrition and infection.l The malnutrition-infection complex begins with the weaning of the child from the breast. At that time, the child often fails to receive sufficient quantities of the high quality proteins which were available to him in breast milk. 2 This nutritional deficiency makes the child more susceptible to severe infections, particularly of the gastro-intestinal tract. 3 The infection, in turn, increases the child's protein and calorie requirements and produces a deterioration of the nutritional state. This downward spiral of malnutrition and infection all too often ends in death. Latin America is certainly no exception to this health problem. Forty percent of deaths are in pre-school children, largely caused by the nutrition-infection complex. In two Central-American countries, Costa Rica and Guatemala, children under five make up 50 percent of all deaths. 4 According to surveys taken by the Institute of Nutrition of Central America and Panama (INCAP), 48 percent of Costa Rican children under five are mal- nourished, as measured by retardation in weight gain. 5 In Guatemala this figure climbs to 75 percent. 6 The chief nutritional deficiency is protein, particularly high-quality protein with an adequate content of essential amino acids. Other nutritional problems in these two countries include caloric deficiency, vitamin A lack and anemia due to insufficient iron and folate. At the age of two years the average child in these countries has reached the weight of a normal one-year-old North American. The average five-year-old weighs the equivalent of a normal child of two years. The principal problem of the underdeveloped world, then, can be solved in only one way: the production and distribution of adequate amounts of high-quality protein food. Yet many governmental and public health people in the United States and the poor nations have an entirely faulty conception of the food problem. Some prevailing beliefs about this problem are summarized in the following four postulates: 1. There is an imminent, inevitable collision between the world's capacity to produce food and the growing population. 7 2. The United States is helping, at least in the short run, to solve the feeding problems of poor countries. 8 3. For a permanent solution to the food shortage, large amounts of private capital must be invested in the production of food within poor countries. 4. What poor people of underdeveloped countries most need is education so they will learn which types of food are healthy.10 In this article we will seriously question these four beliefs, at least for the case of Latin America. In doing so, we will examine a single commodity -- milk -- in two countries, Costa Rica and Guatemala. After presenting the facts of this limited case study, we will discuss the four postulates in light of these facts, making generalizations about Latin America as a whole.-9- MILK IN COSTA RICA Costa Rica has a relatively well-developed milk industry with alyer capita consumption of 0.85 pounds per day. Milk is Costa Rica's fourth largest agricultural industry, following the export commodities of coffee, bananas, and beef cattle. In 1948, many milk producers joined together in the Dos Pinos cooperative, which built a modern proces- ing plant, and now supplies pasteurized milk to the entire country. Dos Pinos also produces non- fat dry milk, which is sold to the Costa Rican government for distribution to children in schools and nutrition centers. While Dos Pinos was developing its powdered milk processing plant, it pressured the Costa Rican government into stopping the donation of powdered milk from the United States through the organization CARE. However, in 1963 a volcanic eruption temporarily destroyed part of the milk- producing area of the country, causing an acute milk shortage. CARE was then asked to bring in non-fat dry milk, which it has done up to the present. (CARE is a U.S. voluntary agency which receives foods from the U.S. government under Public Law 480, and arranges the transport and distribution of these foods in recipient nations.) Milk bought by the Costa Rican government from Dos Pinos and CARE reaches 90 percent of Shool chil- dren and 20 percent of pre-schoolers. The main opposition to CARE has been from the Costa Rican milk industry, especially Dos Pinos. In 1968, when milk was in excess in Costa Rica, the milk producers again forced CARE to stop its milk shipments; the national industry felt that CARE's competition was harmful. CARE in Costa Rica is thus switching from milk to CSM, a high protein mixture of corn, soya and milk. However, in the past year the Costa Rican milk industry has undergone a crisis. Milk production is dropping and farmers are leaving the dairy busi- ness. The reason: dairymen are switching from milk to beef cattle to take advantage of the lucra- tive beef export trade to the United States. Pro- fits on such exports are much higher than returns from producing milk. Under strong pressure from the milk industry, the government raised milk prices by 10 percent. But many doubt that this measure will induce farmers to remain in the dairy field; already the population of dairy cattle in Costa Rica has decreased by an astonishing 65 percent. 1 3 To summarize, then, Costa Rica developed a strong dairy industry partly due to the denial of cheap competitive milk imports by CARE. But because of the recent U.S. policy to import beef from Cen- tral America, Costa Rican milk farmers are leaving the dairy industry in order to raise more profitable beef cattle. Thus Costa Rica's milk production is dropping, and the future of the industry is in doubt. MILK AND INCAPARINA IN GUATEMALA In Guatemala we do not find a strong national milk industry going sour; rather, the industry has always been poorly developed. Consumption of milk is half of Costa Rica's average. 1 4 There is no leader in the dairy business comparable to Dos Pinos; six to eight companies serve only Guatemala City (with just 15 percent of the country's people). All milk in the countryside is raw, and is usually distributed directly from the owner of the cows to local consumers. Government-fixed milk prices have not changed for 18 years, despite rising costs of milk's raw materials, especially cattle feed. With resultant declining profits, milk production in Guatemala -- as in Costa Rica -- has started to go down.l5 Other enterprises, such as exportation of beef, are more lucrative. Two large dairy farmers separately stated "If I could find someone to buy my milk cattle, I would go out of milk production tomorrow." The Guatemalan government buys almost no local milk for nutrition programs. CARE, on the other hand, has a large program, costing the Guatemalan government over $300,000. Yet 75 percent of CARE products go to school children, who are past the nutrition crisis of the first five years; only 10 percent of pre-school children receive CARE milk. The government set up a non-fat dry milk plant in the country, but CARE milk was never shut off -- as in Costa Rica -- in order to allow this plant to grow. Thus the government plant has been a failure, producing very little milk. The availability of cheap CARE milk has taken the pressure off the government to produce its own milk and develop a national industry. Yet milk is not the only product adversely affected by the CARE program. Incaparina, a high quality protein mixture based completely on vege- table sources, is appearing as a milk substitute. Developed by INCAP, Incaparina is made from corn and cottonseed flour which are easily prepared within Central America. By mixing the essential amino acids of various plants, Incaparina has attained a biological value equal to that of milk, glass for glass. And its cost per glass is one- sixth the cost of whole milk. I'~6.- OCTUBRE NOVIEMbRE IHowever, in its ten years of existence Incaparina has had a negligible impact on the Central American nutrition problem. In several countries, attempts to market Incaparina have failed completely. In Guatemala, where it is produced by a local company, Incaparina is a going concern, but a small one. Whereas over 20 million pounds per year would be required to feed all children under five, Incaparina sales in Guatemala are under three million pounds per year. And the greatest use of the product is among middle class families rather than the poor. 1 6 The company is pushing the Guatemalan government to buy the product and dis- tribute it to children in nutrition centers and schools. But U.S. pressure to continue the CARE program has stopped the government from doing so. In Guatemala, then, the malnutrition problem is enormous, and no solutions can be seen on the horizon. CARE milk reaches very few pre-school children, yet CARE's program prevents the distribu- tion of.the cheaper, locally produced Incaparina. The milk industry is small, and declining because export crops are more profitable. We have tried to give a brief picture of the forces which affect one sector of the economy of two small countries. This sector -- the production of milk and a milk substitute (Incaparina) -- is critical for solving the nutrition problem of these countries. But in both countries, it is failing because of considerations unrelated to feeding people. As we return now to the four postulates listed at the beginning of the paper, we will broaden the discussion and look at Latin America in general, referring back to the case studies where appropriate. THE FOUR NUTRITION POSTULATES 1. The food-population collision. There is no demographic-geographic reason why people must be hungry or malnourished in Costa Rica, Guatemala, or in Latin America as a whole_ Latin America, with 16 percent of the world's habitable land, has only six percent of the population. The population density is a sparse eight people per square kilo- meter. 1 7 In contrast to Asia, Latin America is underpopulated in relation to the land available. 1 8 Of the continent's 500 million hectares of arable land, only 30 percent are presently being cultivated. -10- And many of the one billion hectares of forests could be converted into farmland. 1 9 Yet even the proper use of land now under cultivation would vastly increase food for internal consumption. First, large areas of land are under- utilized because the absentee owners of the large plantations have no incentive for high productivity. In Guatemala 2.1 percent of the farms contain 62 percent of the arable land. 2 0 These large hold- ings produce only one-quarter the yield per hectare of a small Guatemalan farm. Similar and more ex- treme patterns are found in many Latin American countries; in Peru, for example, one percent of the farms cover 80 percent of the arable land, and in Chile, large farms produce only five percent as much per hectare as small holdings. 2 1 The Inter- American Development Bank lists this land tenure system as the number one obstacle to agricultural development in Latin America. To remove this obstacle would require a complete reform of the land tenure system, taking away the huge holdings from their owners. Secondly, the most fertile areas of arable land are not used to feed the Latin American popu- lation, but are planted in crops for export to the developed world, especially the United States. In Costa Rica, more land is used to grow the three main crop exports (coffee, bananas, and cocoa) than to produce the three main foods for internal con- sumption (corn, rice and beans). 2 2 In Guatemala, the entire luxurious Pacific coast lands are taken up in export commodities (cotton, coffee and beef cattle), and the country must import corn and beans to feed its people. For Latin America as a whole, the amount of land used for export crops is enormous By converting plantations of coffee, cotton, sugar and bananas, Latin America could raise corn pro- duction by 50 percent, double its wheat production,-11- or increase rice by two and a half times. 2 3 Yet many Latin nations are now importing basic food items such as wheat, corn and beans. Thus massive stretches of arable land are not cultivated at all, are underutilized, or are planted with export crops. It is this pattern of land use, rather than a population-food collision, which is the cause of inadequate food production in Latin America. 2. U.S. food policy. The United States is widely believed to aid Latin America by sending food supplies under Public Law 480 (Food for Peace). Exactly the opposite is true. Looking at the total agricultural sector, Latin America is actually aid- ing the United States. In the first place, much land in Latin America is used to export food to the United States, thus enabling the United States to procure food (as coffee and bananas) not grown in temperate zones. Secondly, the shipment of food under PL 480 primarily benefits American farmers, who need an outlet for overproduced commodities such as wheat, corn and milk. Costa Rica and Guatemala are excellent examples of this international food system which is so bene- ficial to the United States. The richest land is developed by a few large landowners to produce commodities needed by the United States. When the United States cut off the Cuban sugar quota, Costa Rica started to produce and export sugar. When too many bananas were being produced, plantations were switched to new export needs such as cotton and cocoa. Now, the United States needs beef and both Costa Rica and Guatemala are turning their lands to- ward this end. Since the United States can pay higher prices for these products than Latin Americans can pay for basic foods, landowners choose the export crops over grains for domestic consumption. Thus agriculture in Central America, and to some extent in South America, develops in response to the de- sires of the United States, and not to the needs of its own people. After acquiring millions of acres of land in Latin America for its own use, the United States then turns around and offers food to Latin American countries under PL 480. The PL 480-CARE program, however, is no solution whatsoever to the feeding problem of Latin America. It is a stop-gap measure which could be supported as a response to temporary disaster conditions such as floods, earthquakes or droughts. But PL 480-CARE programs have the overall effect of slowing the development of domestic agricultural production, and thus are harmful rather than help- ful to the recipients. In the first place, the CARE program does cost money to the recipient governments -- several hundred thousand dollars in both Costa Rica and Guatemala. This money could be placed into long- range development programs for producing food. Secondly, CARE products compete with local in- dustries; the case of milk in Costa Rica is an ex- ample. If CARE had not been barred from Costa Rica in the mid-fifties, Dos Pinos would not have gotten off the ground. 2 4 Thirdly, in its school feeding programs, CARE accustoms children to foods -- e.g., milk and CSM -- which may never be produced in sufficient quantity in Central America. Thus a taste, and a dependency, is created for American rather than local products. This dependency serves the U.S. farmer who wishes to increase exports, but it hurts the economy of the recipient nation. Fourth, CARE competes with local experiments in high-protein food production. Incaparina is an ex- cellent case; this new food has not been distributed by the Guatemalan or other Latin American govern- ments because of the availability of CARE products. And fifth, P1 480-CARE imports have brought down the prices for local wheat and rice in some countries such that local farmers have no incentive to increase their production. 2 5 Thus PL 480-CARE programs have adverse effects on the development of food industries in under- developed countries. And in addition, the programs fail to make even a temporary impact on the nutrition problem. Whereas the most severely mal- nourished group is under five years of age, most CARE food goes to school children. Costa Rica and Guatemala have a relatively high coverage of pre- schoolers -- from 10-20 percent. Worldwide figures in underdeveloped countries have received PL 480 commodities. 2 6 So PL 480 has little immediate effect, and in the long run, it aggravates rather than solves the nutrition problem of underdeveloped countries. 3. Private investment in local food industries. It is universally agreed that underdeveloped countries -- individually or in regional groups -- should attempt to become self-sufficient in feeding themselves. The method of agricultural growth re- commended by the United States is development by private investment. This means reliance on wealthy individuals, companies and banks to invest in profit- making ventures. However, from the experience of-12- DICIEEMBRE ENERO the milk industry and Incaparina in Costa Rica and Guatemala, such faith in private investment must be questioned. In both countries, milk producers are squeezed between rising costs of raw materials and stable milk prices. The dairymen are responding by leaving their industry and investing in beef cattle or other commodities. Costa Rica and Guatemala are not exceptional cases: on a worldwide basis, per capita milk production is currently declining. 2 7 In the case of Incaparina, the price is fixed by INCAP, and the company producing the food in Guatemala has been losing money. Consequently, there has been insufficient promotion of the new product and its distribution is limited. 2 8 Incapa- rina provides a prime example of how a good, in- expensive protein source is caught between the self- ishness of U.S. food policy and the inability of the profit motive to solve the nutrition crisis. In order to feed poor people, Incaparina must be sold more cheaply; yet to generate profits, Incaparina must be sold less cheaply. The only answer is government subsidy of Incaparina for the poor; yet that solution has been prevented by U.S. pressure to use American milk and CSM. In general, high-quality protein foods are expensive relative to the staple corn, beans and rice. Only by keeping down the prices of these protein sources will malnourished families be able to buy them. Yet if prices are artificially low, production of meat, eggs and milk will not be pro- fitable, and private investors will stay away. It seems clear that reliance on the profit motive will not feed the underdeveloped world. Only a high- priority public decision to place money into the production and distribution of high protein foods for domestic consumption will allow these countries to nourish their own people. 4. Poor people need nutrition education. Many nutritionists, doctors, government officials and food producers in the developed and under- developed worlds believe that poor people are mal- nourished because they do not know what foods to eat. 2 9 In the words of one publication, "Lack of knowledge of the simplest facts of nutrition is at the root of a high proportion of the cases of mal- nutrition today." Many dollars for nutrition educa- tion are spent on the basis of this view. Yet the belief is largely fallacious. Peasants in Central America generally choose their foods in the most intelligent manner possible; that which best satisfies hunger at lowest cost. The diet of the Guatemalan Indian is an example -- corn tortillas and black beans. One pound of corn costs FEBRERo four cents, and can fill up two people for a day. One egg, on the other hand, costs five cents and fails to satisfy one person for one meal. Given that choice, who would not eat corn. No wonder that an Indian, finding that his hen has laid an egg, sells rather than eats the egg. Nutrition programs teaching him to do otherwise will not (and should not) succeed. Education inputs (new seeds, fertilizer, pesticides) may be more expensive than the increased yields are worth. 3 0 The Guatemalan Indians, descendent from the great Mayan culture, were not always malnourished. 3 1 Before the Spanish conquest they had plenty of land, and ate fruits, small forest animals, and fish. Now, however, the European colonists own most of the land, having forced the Indians into smaller and smaller areas and eliminated many of their old food sources. The indigenous people have nowhere to migrate, and their soil is depleted by constant corn harvests. And because they now need money to survive, they sell rather than eat the small amounts of meat, eggs and milk produced by their few animals. Clearly the solution to the nutrition problem of these two million Indians, and tens of millions of peasants throughout Latin America, is to give them back their land. With moderate rather than tiny holdings they could feed both themselves and the cities of their countries. Land reform, not education, can solve the feeding problem in Latin America. SUMMARY The major health problem in Latin America stems from a deficiency of high quality protein in early childhood, resulting in many deaths from the mal- nutrition-infection interaction. This problem is not caused by an overabundance of people relative to the potential food supply, nor is it related to the poor dietary education of malnourished families. Rather, malnutrition in Latin America is rooted in two politico-economic facts. First, the countries underproduce food because of the nature of the land tenure and food export systems. And secondly, the masses of malnourished people can not afford to buy sufficient protein because they have no land and no money. The nutrition problem cannot be solved by U.S. food aid programs or local private investment. The solution lies in land reform, redistribution of wealth, and high-priority governmental action to develop low-cost, high-protein food industries for domestic consumption.Calendar: published by La Clinica del Pueblo Rio Arriba, Tierra Amarilla, N.M. 87575 ($2.50) FOOTNOTES 1. Brown, R.E. Medical Problems of the Developing Countries. Science 153: 271-5, 1966; Scrimshaw, N.S. and Behar, M. Malnutrition in Underdeveloped Countries. New Eng. J. Med. 272: 137-144, 193-8, 1965. -13- 2. Jelliffe, D.B. Infant Nutrition in the Sub- tropics and Tropics (Geneva: World Health Organization, 1955). 3. Gordon, J.E. Social Implications of Nutrition and Disease. Arch. Environ. Health 18: 216- 34, 1969. 4. Las Condiciones de Salud en las Americas 1961- 1964 (Washington: Organizacion Panamericana de la Salud, 1966). 5. Evaluacion Nutricional de la Poblacion de Centro America y Panama: Costa Rica (Instituto de Nutricion de Centro America y Panama, 1969). 6. Evaluacion Nutricional de la Poblacion de Centro America y Panama: Guatemala (Instituto de Nutricion de Centro America y Panama, 1969). 7. Paddock, William and Paul. Famine -- 1975 (Boston: Little, Brown and Company, 1967); President's Science Advisory Committee. The World Food Problem (Washington: Govern- ment Printing Office, 1967). 8. U.S. Department of Agriculture. 12 Years of Achievement under Public Law 480 (Washington: Government Printing Office, 1968). 9. Williams, S. Private Investment in World Agriculture. Harvard Business Review Nov./Dec. 1965; also President's Science Advisory Committee, footnote 7. 10. Education and Training in Nutrition (Rome: Food and Agriculture Organization, 1962); as well as several interviews. 11. Tecnica Agropecuaria S.R.L. Estudios de Mercados en Centroamerica y Factibilidad de Production en Costa Rica (San Jose, Costa Rica, 1970). 12. Interview with Dr. Carlos Diaz Amador. 13. Data from Costa Rican Government Dirreccion General de Estadistica y Censos. 14. See footnote 11. 15. Interviews with Carlos Matheu and Eduardo Castillo. 16. Incaparina Highlights, December, 1968. 17. de Castro, J. Hambre y Desarrollo Economico en America Latina. Economia, July-December, 1962. 18. Cook, R. Population and Food Supply, in Mudd, S. (ed.) The Population Crisis and the Use of World Resources (The Hague: World Academy of Art and Science, 1964). 19. Agricultural Development in Latin America: The Next Decade (Washington: Inter-American Development Bank, 1967). 20. Amaro, N. (ed.) El Reto de Desarrollo en Guatemala (Guatemala: Editorial Financiera Guatemalteca, 1970). 21. The State of Food and Agriculture 1967 (Rome: Food and Agriculture Organization, 1967). 22. Production Yearbook 1968 (Rome: Food and Agriculture Organization, 1969). 23. Ibid. 24. Interview with Warren Bonilla. 25. Schultz, T.W. Economic Crises in World Agri- culture (Ann Arbor: University of Michigan Press, 1966). 26. President's Science Advisory Committee, foot- note 7. 27. See footnote 23. 28. Interview with Paolo Vestini. 29. Kotz, N. Let Them Eat Promises (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1969); as well as several interviews. 30. See footnote 25. 31. Behar, M. Food and Nutrition of the Maya before the Conquest and at the Present Time.

Tags: malnutrition, milk industry, Guatemala, Costa Rica, US role


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