Government under fire for overpaying on food purchases

The government has come under fire from the opposition and a government official has lost his job, after it emerged on Monday that the Social Development Ministry had overpaid – to the tune of more than 100 million pesos – for huge food purchases for social assistance.

The story began on Monday, when several resolutions from the Social Development Ministry were published in the Official Gazette authorising large purchases of basic foodstuffs – namely cooking oil, sugar and rice to supply Argentina’s most vulnerable sectors. The storm continued into Tuesday, with opposition lawmakers said to be seeking full explanations and resignations.

Social Development Minister Daniel Arroyo said Monday that his officials at the portfolio had given priority to the urgency of the situation as a “political decision” after the “suppliers had dug in their heels.”

Other sources reported that the suppliers had refused to negotiate because of arrears dating back to the previous administration and because the crisis otherwise deprived their companies of liquidity.

But President Alberto Fernández immediately ordered Cabinet Chief Santiago Cafiero to freeze and review all contracts with no prices to be paid above the established ceilings.

“If the state pays higher prices than it says, how much moral authority am I going to have when I demand respect from shopkeepers?” the president told TN television news channel on Monday.

While Fernández does not question Arroyo’s honesty, the episode joins a series of government mishaps starting with Health Minister Ginés González García’s initial underestimation of the pandemic and including the chaotic scenes early this month of thousands of pensioners (the most vulnerable group) herding together in the line-ups for their March retirement benefits.

Seven resolutions

The scandal arose from seven resolutions to purchase food for the 11 million people now qualifying for assistance, with the flaw that various items (cooking oil, sugar, spaghetti and lentils) were priced above the levels held in the government’s price-control scheme (which rolls back prices to as they were on March 6), despite being bulk purchases presumably qualifying for a discount.

Some local outlets reported Monday that the goods had been bought at a mark-up of 37 percent higher than others that form part of the Precios Cuidados price-controls scheme.

Social activist Juan Grabois refused to accept Arroyo’s explanations, asking “How can the state allow its suppliers to dig in their heels? Some things have to change.” He charged that some of the purchased pasta trebled the supermarkets in price while being of worse quality.

From opposition ranks, PRO centre-right party chairwoman Patricia Bullrich was also critical, accusing the government of negating its own message: “They paid 108 million pesos too much for sugar, cooking oil and lentils. Minister Arroyo says it happened because the manufacturers dug their heels in. So maximum prices are just for the audience? While most people do not have enough money to get by, the taxes of Argentines are used without control to buy dear.”

On Tuesday, a scalp was handed out. Arroyo asked the Ministry’s Secretary for the Articulation of Social Policy, Gonzalo Calvo – the official who signed off the order to purchase – to resign his post.