NICARAGUA'S FOOD SUMMIT: IF YOU HOLD IT, THEY MAY

UNCLAS SECTION 01 OF 03 MANAGUA 000610

SENSITIVE
SIPDIS

STATE FOR WHA/CEN, WHA/EPSC, EEB, AND IO/EDA
USUN ROME FOR AMB. VASQUEZ AND LDEVALCOURT

E.O. 12958: N/A
TAGS: EAGR ECON EAID PREL NU
SUBJECT: NICARAGUA'S FOOD SUMMIT: IF YOU HOLD IT, THEY MAY
NOT COME.


1. (SBU) Summary: On May 7, President Ortega held a "Food
Sovereignty and Security Presidential Summit: Food for Life."
It was to be headlined by Venezuela's Hugo Chavez and
attended by 11 Latin American and Caribbean presidents.
However, at the last minute Chavez, pleading illness,
canceled and four other presidents did not show. President
Arias of Costa Rica and the Salvadoran Foreign Minister
refused to sign the Summit Declaration due to its criticism
of free trade and its heavy ALBA focus. Chavez' failure to
attend did not staunch the rhetoric, however, as the
presidents of Bolivia, Haiti, Ecuador, and Honduras all made
statements blaming the United States, neoliberalism, and free
trade for the current global food price crisis. Venezuela's
Foreign Minister Maduro tabled a seven-point plan which will
be considered at a technical meeting Mexico offered to host
on May 28-29. Food security will also be a topic at the
upcoming Fifth Latin America, Caribbean and European Union
Summit taking place in Lima May 16-17. While billed as a
serious effort to find solutions to food security concerns,
Ortega's summit was in fact designed to be the ideological
launching pad for an ALBA program for "food sovereignty."
End Summary.

Lofty Ambitions...
--------------


2. (U) In mid-April, with much fanfare, President Ortega
announced that on May 7 he would host a "Food Sovereignty and
Security Presidential Summit: Food for Life," presided over
by Venezuela's Hugo Chavez and attended by 11 Latin American
and Caribbean presidents. The event was engineered to
showcase Nicaraguan President Daniel Ortega's leadership
position in the Americas. The Summit was to conclude with
the signing of a Food Sovereignty Declaration that would set
out strategies for the countries to address the current food
security crisis. Another goal was to receive pledges for a
USD 640 million fund for projects to increase agricultural
production in 2008-2009. Chavez' offer of a USD 100 million
line of credit several weeks ago was to form the core of this
fund.

Crash to the Ground...
--------------


3. (SBU) By all measures, the Summit was a failure. At the
last minute Chavez did not attend, claiming illness. The
presidents of Mexico, Guatemala, the Dominican Republic, and
El Salvador also declined the invitation, sending their
Foreign Ministers. Costa Rica's President Oscar Arias did
attend, but walked out half-way through, refusing to sign the
Food Sovereignty Declaration because it criticized free
market economics and emphasized the Bolivarian Alternative
for the Americas (ALBA) as the way forward. El Salvador's
Foreign Minister also declined to sign, stating that one
should separate ideology from practical programs. The
Agricultural Production Fund was not discussed after it
became clear no one was prepared to make pledges. The only
president with a concrete plan was Haiti's Rene Preval, who
announced that his government would subsidize the price of
flour, rice, and cooking oil for the next six months.


4. (U) During press interviews following Costa Rican
President Arias' walk-out, he expressed appreciation for
Venezuela's offer of a USD 100 million line of credit, but
added that any Central American country can approach the
Central American Bank for Economic Integration (CABEI) for a
similar deal "without any ideological conditions attached."
In fact, CABEI president Harry Brautigam announced at the
summit that the bank is studying a proposal to provide a
total of USD 250 million in lines of credit for agricultural
production to the Central American countries. The program
would finance the production of basic grains, storage
infrastructure and improvements linked to agricultural
logistics.

But Rhetoric Remained Lofty
--------------


5. (U) Chavez' absence did not result in a reduction in
rhetoric. The presidents of Bolivia, Haiti, Ecuador, and
Honduras all made statements blaming the United States,
neoliberalism, and free-trade for the current global food
price crisis.

- Nicaragua: Ortega labeled free-trade as the "principal
enemy of the people;" adding that "food cannot remain under
the rules of supply and demand as this impoverishes both
consumers and producers for the enrichment of the middleman."


- Ecuador: Correa emphasized the need to spur domestic
agricultural production while eliminating free-trade
practices.

- Bolivia: Morales equated capitalism to death, claiming that
the U.S. would not help with the crisis. He called for the
governments present to work with their local agricultural
producers and social movements to develop a solution.

- Honduras: Zelaya complained of the slow response by
international financial institutions and claimed neoliberal
policies relegated the state to the role of passive observer
of hunger.

- Cuba: Vice President Lazo blamed high world food prices on
high oil prices, which he attributed to the war in Iraq,
climate change, and U.S. and EU neoliberal economic policies.


- Costa Rica: While Arias criticized the U.S. for offering
just USD 1 billion to resolve the food crisis, "an amount the
United States spends in half a week in Iraq," he urged the
Latin American nations to "do their homework and not depend
on the international community for solutions." He advocated
effective fiscal policies "as a way to strengthen countries
and their productive sectors."

Highlights from the Summit Declaration
--------------


6. (U) Instead of a road map to food sovereignty, as it was
touted, the Summit Declaration was essentially an ideological
document. It blamed high food prices on U.S. and EU
agricultural subsidies, biofuel initiatives, and neoliberal
economic policies. The Declaration highlighted regional
frameworks which could implement a Latin American response to
the crisis, with ALBA boasting the highest billing. It
called on international organizations to quickly disburse
short term credits for agricultural production. Signatory
countries are to subsidize agricultural production through
credits to producers; require banks to dedicate 10% of their
portfolio to agricultural production; and, create funds that
ensured agricultural producers received financing,
technology, tools, machinery, inputs and fair prices. The
Declaration also required the signatories create National
Action Plans on Food Security and Sovereignty that reflect
the principles of "Solidarity and Cooperation,
Complementarity and Recognition of Asymmetries and Fair Trade
between and within countries (fair prices for consumers and
producers.)" Only ALBA member countries (Nicaragua,
Venezuela, Haiti, Bolivia, and Cuba) signed the document.
Full text of the Declaration in Spanish can be found at:
www.presidencia.gob.ni.


7. (U) Venezuela's Foreign Minister Maduro tabled a
seven-point plan during the summit, which was annexed to the
Declaration. The plan called for:

1) an Agrarian Bank to reduce the costs for small and medium
producers;

2) USD 100 million from Banco ALBA to finance agricultural
development projects in Central America;

3) a special plan within Petrocaribe (subsidized Venezuelan
oil) to finance agricultural production;

4) strengthening governments through a special tax for the
creation of a Special Agricultural Fund;

5) transferring lands confiscated from drug traffickers to
farmers;

6) establishing an agricultural research center; and

7) convening a summit of petroleum producing countries to
explore a "petro-agrarian solution," that would support the
Agricultural Fund.

Technical working groups are supposed to study the Venezuelan
proposals and prepare a report for consideration at a
technical meeting the Government of Mexico has offered to
host on May 28-29. Peru's Ambassador to Nicaragua also
announced that food security will be a central issue for the
upcoming Fifth Latin America, Caribbean and European Union
Summit taking place in Lima May 16-17.

Comment
--------------


8. (SBU) While the Summit was originally billed as a serious
endeavor to find solutions to current food security issues,
agriculture ministers who attended the April 26 preparatory
meeting in Managua, quickly realized that the event would not
be much more than a launching pad for an ALBA program for
"food sovereignty" to compete with solutions being developed
by western donors. The lack of high level participation and
final agreement were a clear rejection of Ortega and Chavez'
attempt to politicize a serious problem, and added an
additional sour note to a difficult week in Nicaragua, also
marred by a national transportation strike.

TRIVELLI