BOLIVIAN FOOD SAFETY TAKES BACK SEAT

C O N F I D E N T I A L SECTION 01 OF 04 LA PAZ 000111

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/08/2017
TAGS: ECON PGOV AGR FAO FAS IFAD IICA EINV BL
SUBJECT: BOLIVIAN FOOD SAFETY TAKES BACK SEAT

REF: LA PAZ 3236

Classified By: Acting EcoPol Chief Brian Quigley for reasons 1.4 (b) an
d (d).


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Summary
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1. (C) The Bolivian Animal and Plant Health Inspection
Service (SENASAG) is facing a funding crisis heading into the
new year. The termination of an Inter-American Development
Bank (IDB) loan and an unwillingness to accept administrative
controls mandated by the P.L. 480 program leave SENASAG
facing a budget shortfall of over $5 million or 57% of their
2008 budget. Currently, only 40% of SENASAG employees are
working as the Ministry of Agriculture continues to muddle
through with a SENASAG reorganization. The process
demonstrates a disregard of SENASAG's institutional
integrity, the GOB's prioritization of political objectives
over technical goals, regional rivalries, institutional
incompetence, and hostility towards U.S. development
assistance. Meanwhile, programs designed to control
biological threats to the food supply (including hoof and
mouth disease) are at risk in 2008. End Summary.

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An Incompetent Ministry Focused on Politics
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2. (C) The Ministry of Agriculture (MDRAyMA) under the
Morales Administration often appears more focused on
political ends than on providing competent service to its
constituents. A clear example is the Ministry's dealings
with SENASAG, the Bolivian equivalent of the Animal and Plant
Health Inspection Service (APHIS). Over the past year, it was
clear that the agency would have financial difficulties as
IDB funding came to a close. Contingency plans were
continually postponed as the Ministry voiced its desire to
"reorganize" SENASAG. To date, no formal reorganization has
been realized and according to Luis Carrasco, Administrative
Specialist for APHIS, who works within SENASAG in a separate
administrative unit (UNADE),the agency faces a budget
shortfall of over $5 million or 57% of their 2008 budget.
Currently, only 40% of SENASAG employees are working.


3. (C) The USG is involved with SENASAG through APHIS
employees who work directly in the agency and through
financing from remaining Title I USDA funds (Ref. A). Aware
of the looming crisis, Regional Agricultural Counselor
(Eugene Philhower, based in Lima) proposed using $800,000
from the remaining Title I funds to fortify SENASAG, as long
as the UNADE unit remained in place to effectively administer
all program funding. He thinks that UNADE control over
finances is vital to curb the Ministry's penchant for placing
MAS party members in an agency with easy access to small
farmers throughout the country. Despite letters explaining
the offer, no proposals were put forward by the Ministry
until December 24th when P.L. 480 Secretariat Director, Juan
Carlos Rodriguez was contacted by the Ministry. Rather than
calling for a P.L. 480 board meeting, the Ministry wanted to
set up an emergency teleconference with Embassy officials in
Lima and La Paz on December 28 to consider funding for
SENASAG. After that initial outreach, no additional, more
formal proposals have been put forward.


4. (C) In a January 7 meeting, SENASAG Director, Rolando
Cazzol offered no insights as to when SENASAG reorganization
would be complete. Moreover, there was no plan in place to
replace missing funding for 2008. It also appears that
rather than allow UNADE to continue operating with a
transparently hired, technically competent staff, the
Ministry would prefer a crippled SENASAG to partially operate

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through 2008. (NOTE: Moreover, of the $1 million that the
P.L. 480 board approved over a year ago for SENASAG to
execute a Newcastle disease control program, only $46,000 has
been spent. When asked why these funds have yet to be
utilized, especially considering the funding shortages, Oscar
Sandy, Chief Administrator of SENASAG, replied that the
strange controls imposed by UNADE prevented him from spending
the funds. Luis Carrasco denounced this as ridiculous to
EconOff. Both he and Cesar Orozco, the Veterinary Officer
provided by APHIS, think that withholding the funds is
strictly political. Moreover, they say that Sandy has been
blocking most funding for technical programs over the past
year. Both APHIS employees believe that Sandy will now blame
UNADE controls for SENASAG inefficiencies and will seek to
justify its elimination, or at least the replacement of its
personnel. End Note.)


5. (C) The situation is made even more unpredictable, as the
Minister of Agriculture, Susana Rivero, appears to be on the
verge of being replaced. President Morales recently
denounced her as part of the "oligarchy" and wondered
publicly why she was part of his government. In practical
terms, a new Minister would probably signify both new
leadership at SENASAG (Cazzol is rumored to be a high school
sweetheart of Rivero) and starting any reorganization plans
again from scratch.

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IDB Observations Match Our Own
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6. (C) According to the Senior Multi-Sectorial Specialist
at the IDB, Masami Yamamori, IDB administrators were
concerned about institutional sustainablity in SENASAG due to
constant personnel changes. SENASAG hired around 300
"consultants" for temporary work in 2007 and Yamamori also
thought the Ministry was using SENASAG for MAS political
activities. Despite this, Yamamori said that the IDB would
be considering funding additional SENASAG programs for 2009
if they receive a promised formal proposal from the
government. (NOTE: Oscar Sandy said that IDB funding for
2009 was 80% secure. Curiously, Yamamori also said that a
SENASAG proposal would have a leg up on other proposals in
Bolivia because it has a proven track record. The IDB has a
$75 million quota for Bolivia in 2009. End Note).

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The Departments Want Control
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7. (C) An additional reason for SENASAG's budget shortfall
is that the opposition departments of the 'Media Luna'
(Tarija, Santa Cruz, Beni, and Pando) have all withdrawn
financial support for the agency. All are demanding a
greater say over SENASAG activities within their departments.
Tarija has moved the furthest in establishing independent
plant and animal health operations. The prefect currently
funds and staffs its own foot and mouth disease control
program and just established an independent organization for
control over fruit flies. According to the Prefect's
Secretary of Economic Development, Ernesto Farfan, the MAS

SIPDIS
had been using SENASAG workers for political means. He even
blamed the agency for organizing several blockades in Tarija.
He claims that the national organization could recognize the
work of third parties in carrying out food safety programs,
and thus give department exports national certification, but
it is something that SENASAG leaders would be unlikely to
concede. Tarija will share their experiences in a January 17
meeting in Santa Cruz where "relations with SENASAG" will be
discussed among 'Media Luna' agricultural leaders.


8. (C) Claims of abuse are not one-sided. Oscar Sandy
accuses the Tarija Prefecture of spreading anti-MAS
propaganda while carrying out cattle inoculations. APHIS

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employees think that both claims are probably true and that
both they and their technical work are caught uncomfortably
in the middle.

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Dangerous Ramifications
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9. (C) Despite the negative portrait of the situation,
SENASAG has achieved many successes. Carlos Covarrubias,
APHIS Program Coordinator in Santiago, Chile described how
since UNADE controls were placed in SENASAG seven years ago,
Bolivia has been able to control its foot and mouth disease
problems and effectively initiate other technical programs.
Unfortunately, these advances are currently threatened.
Under the Morales administration, technical work has been
increasingly difficult to carry out (particularly since
Minister Rivero was appointed one year ago). The
ramification is that Bolivia is again vulnerable to disease
outbreaks. The most high profile is foot and mouth disease,
which can not only threaten beef and other agricultural
exports from Bolivia, but can also quickly spread throughout
the region.


11. (C) It is not just beef exporters however, who will
suffer with a dysfunctional SENASAG. For example, a program
for the control of fruit flies was just initiated in Bolivia.
According to the local APHIS representative, 40%-60% of
Bolivian fruit is lost because of fruit flies. Ironically,
it is not the large producers who are most affected (they
have the money to spray),but rather all rural Bolivians with
a fruit tree or two. Similarly, the avian Newcastle disease,
which can wipe out all the chickens in an infected area,
likely won't affect large exporters who can afford to
inoculate their birds, but rather those rural families that
critically depend on eggs and chicken for protein in their
diet. These concerns for the poorest Bolivians however, have
taken a back seat to regional conflicts and political
agendas.


12. (C) The personnel upheaval in Senasag also has
implications for the continued sound operation of the
Phyto-sanitary Inspection Center based in the Chapare region
of Bolivia. This region has received heavy U.S. assistance
to reduce coca production and spur sustained economic
development based on high value export crops, e.g., bananas,
pineapples, and palm hearts. The inspection center was
jointly funded by USAID and the British Government and is now
owned and managed by SENASAG. Currently, the center is being
operated with minimal personnel resulting in weakened
inspection, quality control, and speed of certification.
Even if the center is once again fully staffed with new
personnel, the learning curve means that export processes
will be slowed down. Furthermore, if SENASAG is not able to
carry out its responsibilities in controlling problems such
as foot and mouth disease in the Chapare, this could
seriously hurt the ability of farmers to continue to export
from this region. To date, USAID-funded programs have taken
on this responsibility, but ideally and over the long term,
SENASAG needs to provide this service.

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Comment
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11. (C) After dialogue with SENASAG officials, it is the
conclusion of USDA, APHIS, and Embassy officials that we must
take a "wait and see" approach toward SENASAG funding through
the P.L. 480 program. While probable backsliding on plant
and animal health control programs is regrettable, providing
the MAS controlled agency with a blank check for
reorganization plans is unpalatable. Ideally the government
will realize that the technical work is important and that
the model suggested by the P.L. 480 board is both logical and

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has achieved laudable advances in the area, but currently
this positive outcome seems unlikely. Ultimately, if the
Morales administration truly thought that the work being done
by SENASAG was important, it could use some of its budget
surplus to fully fund the agency in the form of its liking,
but that too appears unlikely.
GOLDBERG