• Fri. Mar 1st, 2024

Examining Food Value Chains: Understanding the Causes Behind Rapid Inflation and Its Impact on Families and Producers.


Feb 13, 2024
Government to analyze the value chains of basket products

The Undersecretariat of Consumer Defense and Commercial Loyalty, a branch that falls under the purview of the Ministry of Economy, is planning to undertake new studies on the value chains of some products in the basic basket amidst the rapid pace of inflation. The goal is to gather information about the formation of prices for the foods that people consume most and have seen significant increases in the past year.

The value chain refers to the sequence of activities that add value to a product or service. As an official source stated, this analysis helps determine a company’s competitive advantage and is also an important tool for consumers to understand where the cost that a merchant intends to charge for a certain product or service comes from.

The Undersecretariat plans to begin by examining the value chain of essential foods for family consumption, such as oil, rice, and fruits and vegetables. According to recent reports from both private sector sources and government agencies like CAME and FADA, these types of surveys are essential given that food has been one of the items registering increases above general inflation in recent years.

In December 2023, Agri-food prices multiplied by 3.5 times from field to shelf, according to CAME’s report. Furthermore, taxes play a significant role in shaping food prices, with 25% of the final price being made up by taxes according to FADA. The increase in food prices has a strong impact on families’ budgets, particularly those with lower incomes who allocate a greater percentage of their income towards purchasing these products. Producers are also affected as they receive only $3.5 for every $1 they produce according to CAME’s report in December 2023.

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