The 16 percent increase in the cost of electricity approved by the government in February went into effect April 1. However, the president of the National Energy Commission, who is also the manager of the National Electricity Company (ENEE), stated that the hike will only affect those who consume more than 300 kilowatts a month. -- El Tiempo

The Honduran American Chamber of Commerce (AMCHAM) recently opened a employment database for affiliated companies. Potential employees include university graduates, secretaries and even errand boys. This service is free for members in Tegucigalpa and San Pedro Sula. -- El Tiempo

Authorities of the Ministry of Agriculture and Cattle Ranching have decided to fire all of employees at land border crossings for their alleged involvement in corrupt activities. Apparently, the employees are engaging in tax fraud, charging lower amounts of taxes in exchange for a bribe.

Francisco Rodas, the assistant director of the ministry's plant sanitation department, stated that "due to the high degree of corruption detected at the customs points, we decided to fire all employees at all land border points." He also said the ministry will implement mechanisms to guarantee that new employees carry out their duties correctly. -- El Tiempo

On Tuesday, the manager of the Salvadoran Corporation of Exporters, Silvia Cuellar, denounced measures Honduras has placed on the transportation sector as violating regional integration agreements. Cuellar stated everyone was surprised when last Friday, Honduras suddenly began demanding a series of requisites from trucks entering the country.

The President of the Salvadoran Association of Land Cargo Transportation, Ricardo Ballestero, said Honduras is charging more than US$10 for a guard to accompany trucks while they journey through Honduras, as well demanding the presentation of sanitation permits for products of animal or vegetable origin. He said that although Honduras justifies the new requirements as part of its fight against drug trafficking, the measures are affecting thousands of innocent people. Since last weekend, nearly one thousand Salvadoran and other Central Americans trucks were stuck at border crossings as the truck drivers knew nothing about the new requirements. Ballestero also insinuated that the measures may have been taken due to the conflict between Honduras and Nicaragua.

Meanwhile, Honduran Commerce Minister Oscar Kafati denied these allegations, stating that the measures are only "temporary" in order to control drug trafficking and smuggling. -- El Tiempo

Honduran President Carlos Flores met with directors of the Honduran Council of Private Enterprise (COHEP) last week to go over final details of a free trade agreement with Mexico. COHEP President Julliete Handal later stated that Honduras and Mexico have agreed on terms for all products except vegetable oils and textiles, but that these points are expected to be resolved soon since Honduras has already made a counteroffer that should be accepted by Mexico. -- El Tiempo

By WENDY GRIFFIN

When the Saba-Trujillo Road was out after Hurricane Mitch and Tropical Storm Katrina, buses from Tocoa and Trujillo switched to an alternative road through Sonaguera. Around this town there are a number of Agrarian Reform Cooperatives dedicated to growing oranges. Since early December, Spanish-language papers have reported high production, but disastrously low sales for these citrus growers. Now, rotting oranges dot the Tocoa-La Ceiba road.

Most growers produce naranja victoria or naranja pina for orange juice and consumption. Two companies used to buy these oranges to make juice. Recently, one company bought the other, but only one factory is now open. The company has used this monopolistic position to buy oranges at Lps. 60 to Lps. 80 per 1,000 oranges, as compared to Lps. 160 to Lps. 180 two years ago, reported a Quebarada de Arena grower.

In addition to this company, Salvadorans used to come and buy the oranges at a better price than the juice company. These Salvadorans were coyotes (middlemen) who sold them in the Tegucigalpa market and in El Salvador. Although it is true some access roads are impassible as reported by the Honduran press, most oranges are grown near roads not effected by Mitch. It is not clear why the Salvadoran buyers are not coming.

Selling to middlemen or coyotes is generally the path to low earnings. If oranges are Lps. 60/1000 oranges in Sonaguera and retail for Lps. 1 per unit in Tegucigalpa, it is because the Lps. 940 remains in the hands of coyotes or retailers. "Everyone gains except the grower," said one local grower.

Farmers who take their produce directly to small sellers earn more. Making fresh squeezed orange juice is an important source of income for hundreds of families, especially those selling it to bus travellers. Many women also sell fresh oranges to eat. Growers earn Lps. 20/100 oranges (Lps. 200/1000) but they have to pay pickers, as well as buy gasoline and provide maintenance to their trucks.

In the United States, the orange rind is also saleable. It is used as a flavoring. Producers would need information on how to prepare rinds and who buys them in order to access this market.

Producers may also de missing markets when they only pay attention to the fruit. In Honduras, bitter orange, sweet orange, and lemon leaves are medicinal plants whose efficacy for treatment has been confirmed by researchers of the National Autonomous University (UNAH) and Garifuna healers.

These leaves could be dried and sold as medical plants in Honduras and abroad. For example, a tea of bitter orange and lemon leaves was supposed to treat many opportunistic diseases caused by AIDS and help prevent wasting. Even in Trujillo, people sometimes report difficulty in obtaining sufficient quantities of bitter orange and lemon leaves, because as the houses get larger, the solares or yards for fruit trees get smaller.

Orange leaves in the United States often cannot be used in medicinal remedies because of the widespread use of pesticides. Tocoa area growers said they use fertilizers, but not pesticides, so these leaves could be used.

The current crisis of orange growers, however, can be blamed in great measure on Honduran technicians who have encouraged monoculture on Honduran cooperatives, such as plantations of just orange trees or African palms. This means that when people cannot sell these crops, or prices are so low they cannot recoup their production costs, there is no money for food.

If they divide their crops between commercial crops like oranges and basic grains, yuca, vegetables or other fruits like mangos, the farmers would have something to eat in times of low orange demand or prices.

Also, as cooperatives over-emphasize monoculture of commercial crops, there is little fresh produce available on the North Coast. Less than 27 percent of Honduran agricultural production is designed to meet internal demands and this percentage is falling. Honduras is not self-sufficient in grains, but rather imports 2.5 million quintales (100 lb. sacks) of corn and 128,000 quintales of beans, according to Interforos. Rice also has to be imported. Given the high devaluation of the lempira, this makes food more expensive here.

The current situation of Honduran orange growers can be seen as the handwriting on the wall for Honduras' African palm growers. Hundreds of acres are planted in palms not yet producing. Dole and Chiquita have both reported they are increasing their production of African palm as they reduce their banana acreage after Mitch. FONAPROVI, the National Fund for Production and Housing, will provide $16 million to start a new African palm company in Tocoa, INDUPALMA, a private company spearheaded by Honduran businessman Miguel Facusse. This will limit the market share possibilities of any independent growers.

This government-funded expansion (and by the agency in change of housing) is at a time when the price for African palm oil has fallen more than 50 percent from $680/ton to $350/ton. In Honduras, palm oil is used to make soap, vegetable shortening (manteca), oil, and as an additive to milk and processed cheese. Pigs are also fed a concentrate made from African palm oil. The expansion of the African palm industry by 10,000 hectares per year is done on speculation that a larger percent of the crops will be exported to Mexico and the Caribbean. Unlike bananas and oranges, which are moving to lower levels of pesticide use, there are no industry standards for "eco-friendly" African palms.

At a time when the world is moving away from high cholesterol fats like palm oil, it is surprising to see Honduras increasing production of this crop while in front of these trees grow "chichipinse," a medicinal plant that is a natural antibacterial and anti-fungal plant, whose soap has to be made in El Salvador and imported to Honduras because no one processes it here.

Due to irregularities discovered by a special investigative committee appointed by Congress, the mining company Minerales Entre Mares de Honduras, S.A. may be forced to stop gold mining activities in San Ignacio until the situation is cleared up.

According to the report prepared by the committee, the required operating permit was obtained irregularly. Also uncovered by the commission is the fact that since the company started operating prior to receiving the permit, it was supposed to been fined between Lps. 600,000 and Lps. 1 million. However, the firm only paid Lps. 5,000, cause for suspecting corruption.

Meanwhile, San Ignacio residents are threatening to march on the capital due to the fact that Environment Minister Xiomara Gomez, in the company of the mining company's representatives, toured the area last week trying to convince them to peacefully allow Entre Mares to continue operating.  La Tribuna

Minister of Industry and Commerce Oscar Kafati announced last week that his ministry has begun revising the current Investment Law with the specific purpose of eliminating obstacles that delay the constitution and inscription of new companies.

Kafati stated that red tape is one of the main obstacles for attracting new foreign investment and one of the principal causes of low economic growth, saying "until now we have not efficiently attracted foreign investment nor guaranteed judicial security." He also said devaluation and high inflation have limited national investment due to the high cost of money, making bank certificates of deposit and similar financial instruments more attractive to investors.

During the Central American Summit of Presidents with the President of Brazil held in San Jose, Costa Rica, President Francisco Flores of El Salvador proposed to his regional counterparts and Brazil a mechanism to regulate the price of coffee in international markets.

According to Flores, since Brazil and Central American countries place among the top 15 world coffee producers, many of in which coffee is one of their largest exports, prices should be regulated so as to safeguard national economies. He stated that while many countries lowered the price of their coffee during financial crises, regulation is necessary to control plummeting international market prices. - El Heraldo

According the Central Bank of Honduras (BCH), consumer spending has almost doubled during the last four years. BCH statistics show that from 1996 to 1999, consumer spending increased from Lps. 35,683 million to Lps. 60,375 million.  El Tiempo

Although the government is seemingly doing everything in its power to attract foreign investment, statistics show that during the last four years, there has been little increase in this area. According to the BCH, 84.3 percent of the investment was national, a mere 15.7 percent foreign in 1996, with little variation in 1999, in which 88.6 percent of investments were national and only 11.4 percent foreign.  El Tiempo

With increased tax revenue collection in mind, the Department of Revenue (DEI) will soon be divided into three regional sectors. Plans to open branch offices on the North Coast and in eastern Honduras were announced last week by the DEI Director Jorge Yllescas Oliva as part of the restructuring plan currently taking place within the institution as a means of increasing efficiency.  El Tiempo

The director of the department of revenue (DEI), Jorge Yllescas Oliva, last week announced plans to work in collaboration with the Honduran Counsel of Private Enterprise (COHEP) to nab tax evaders. According to a recent DEI study, only 35,000 people, businesses and services pay all their taxes out of the 500,000 that should pay.

Yllescas stated that he is going to meet with the new president of the COHEP, Julliete Handal, to seek her assistance in reducing tax evasion and increasing income. He said they will probably form a committee to work together on the problem and establish tax control mechanisms, as well as conducting surprise inspections to catch businesses that don't pay all their sales taxes, where he stated the largest portion of income is lost. -- El Tiempo

The Central American Bank of Economic Integration (CABEI) will lend Honduras approximately US$251 million to help the country cancel its high-interest loans with the bank.

Last week, Finance Minister Gabriela Nunez sent to Congress the agreement between CABEI and the Central Bank of Honduras that will replace all previous short-term loans with one large loan to be paid in 25 years. The loan agreement must be approved by Congress before it can take effect.  El Tiempo

Due to inflation, the value of the lempira has gone down once again from 8 U.S. cents in 1999 to 7 U.S. cents in 2000. To make matters worse, more than half the Honduran population earns less than Lps. 1,500 a month, which means that most of the people's earnings must be spent to cover basic necessities, with no provisions for typical developed countries budget items such as entertainment and home investment. -- El Tiempo

Foreign investment rose from US$99 million in 1998 to US$175 million in 1999. This 76 percent increase can be attributed to the government's efforts to attract foreign investment during the last decade. -- El Tiempo

According to the Central Bank of Honduras (BCH), machinery, electrical equipment and materials accounted for the largest amount of imports during 1999. By November of 1999, US$511 million worth of machinery was imported, as opposed to the November 1998 amount of US$453 million.

Find out how to advertise
in HTW Online and increase traffic to your website.

 

www.TECNOBUFETE.COM  Internet Lawyers specializing in Technology  e-commerce,  ngo's on-line S.DE.R.L.  Tel. (504) 237-4569  Cell. (504) 990-9823  tecnobufete@ tecnobufete.com  GUTTIERREZ AND ASSOCIATES Law Offices Commercial Law Labor Law International Law Administrative Law Business Law Consultations Maritime Law Trademarks Immigration and Residency Papers Notary Services Associated with U.S. Law Firms Colonia Ruben Dario P.O. Box 30055-Toncontin Tegucigalpa, Honduras, C.A. E-mail : jgutierr@david.internet.hn Tel.(504) 232-1391 Fax (504) 232-9020