Bolivia applies its bank reserves to agricultural investment

Fearing a food crisis, Bolivia has indicated it is ready to apply the $10 billion reserve currently available in its central bank for massive investment in national agricultural activities.

At the root of the decision is the high inflation of food prices that affects Bolivia, as well as all developing countries. As a result, unprecedented waves of protests threatened to turn violent and the Bolivian Government decided on the implementation of new measures.

Bolivia’s central bank reserves will be directly used to increase loans to farmers, guarantee lower prices to consumers and establish a public entity to manage food stocks made up of staples such as wheat, corn, soybean and rice.

The Government thereby hopes to increase agricultural production to shore up food reserves and thus avoid the possibility of a food crisis. “For the first time ever, Bolivia is going to grow agricultural products to stock them, since a food crisis might occur,” said Luis Arce, the Bolivian Minister of Finance.

Confronted with new soaring prices that affect all agricultural commodities worldwide, many governments are thus starting to implement unilateral measures to ensure their food security and prevent social unrest. One of the key measures set forth is building up food reserves. However, it is crucial to achieve some level of international cooperation, so that this regulatory mechanism can best perform. An issue that should be included in the up-coming G20 agenda…