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PERU: Nutritional Supplement Programme Big Business for a Few

Ángel Páez

LIMA, Feb 24 2011 (IPS) - Peru’s Glass of Milk Programme (PVL) is failing in its aim of providing nutritional supplements to all poor children in Peru. But it has been a big business opportunity for the handful of companies that supply the programme, according to a special audit report seen by IPS.

Children in Peru receiving the nutritional supplement. Credit: Ángel Páez/IPS

Children in Peru receiving the nutritional supplement. Credit: Ángel Páez/IPS

The PVL, the Peruvian government’s biggest social assistance programme, currently helps meet the nutritional needs of 2.7 million people, 59 percent of whom are children aged six and under.

The regulations stipulate that each nutritional supplement — consisting of milk and cereals or flours — must contain at least 207 kilocalories. But the study by the Comptroller General’s Office found that a mere four percent of the rations met that requisite in 2009, the year under review.

The government spends some 135 million dollars a year on the PVL. The funds are distributed to the country’s 1,834 municipalities, which are in charge of distributing the nutritional supplement among the needy. The municipal governments are also responsible for ensuring that each ration contains the required kilocalories.

The PVL has fallen short in covering the nutritional needs of the target population: poor children up to the age of six, pregnant and nursing mothers, the disabled, children aged seven to 13, and tuberculosis patients.

But for the suppliers, it is a lucrative deal.

According to the Comptroller General’s Office, five companies in Lima provide 38 percent of the supplies purchased for the PVL by municipal governments nationwide. And most of these corporations are not food producers, but intermediaries.

For instance, the Lima-based Niisa Corporation, which controls 20 percent of sales to the PVL, does not produce canned evaporated milk, the main product it supplies to the government programme.

Purchasing supplies from intermediaries drives up the costs for the municipal governments.

“There is no law requiring or prohibiting that the municipal governments purchase milk of one kind or another, only an indication that each ration must contain 207 kilocalories,” Comptroller General Fuad Khoury told IPS.

“For that reason, we have found 8,490 different combinations of milk,” he said. “What is distributed in Lima is not the same as what is distributed in the (department) of Cuzco, and so on. But the biggest problem is that the tendency to use evaporated milk means higher costs.”

When centre-right President Alan García’s five-year term began in 2006, the municipal governments were paying the equivalent of 1.46 dollars per can of evaporated milk — a price that had gone up to 2.11 dollars by 2009.

By comparison, the price of fresh milk, which is used much less widely than evaporated milk in the PVL, only rose from 0.34 to 0.48 cents of a dollar.

“The main suppliers of the PVL do not offer the best prices, despite the enormous volume of products purchased by the municipal governments,” Jesús Arias, performance manager in the Comptroller General’s Office, told IPS.

“The municipal governments do not look for the lowest price on the market, as the law stipulates, and this doesn’t only happen in the provinces, but in the capital as well,” he said. “Lima and (the port city of) Callao are adjoining, but they pay different prices for the same product.”

In 2009, a total of 6.6 million dollars worth of canned evaporated milk was purchased for the PVL, 73 percent of which was Gloria, a local brand. However, the company that produces the milk did not sell it directly to the municipalities, but to intermediaries, with the subsequent rise in cost.

“A ration made with evaporated milk costs twice as much as one using fresh milk,” Khoury said. Using cans of evaporated milk “is a habit acquired by the mothers who the municipalities have put in charge of distributing the nutritional supplements.”

The supervisor of the PVL in the Comptroller General’s Office, Juan Carlos Cuadras, said a national oversight body should be created for the programme, which would standardise the content of the nutritional supplements according to the characteristics of each region.

The oversight body should also be in charge of the collective purchasing of the supplies at better prices, and of monitoring the programme, to ensure that the supplements meet the minimum kilocalorie requirement, he added.

Cuadras also said, “We depend on what the municipal governments report” — 25 percent of which failed to submit reports on the results of the PVL in 2009. “If there were a central body, there would be better follow-up, and of course more accurate results,” he told IPS.

Khoury said it was “inexplicable” that there was no central body running the PVL, even though the programme, created in 1985, is national in scope, is aimed at fighting malnutrition among the poor, and has one of the biggest budgets among the government’s social programmes in this South American country of 29 million people.

“The state makes a huge investment in social spending, but the returns on that effort are not satisfactory,” he said. “The results of the Glass of Milk Programme show that children up to the age of six, who are the top priority of the programme, are not receiving supplements with the established nutritional value.

“The answer is to set up a central body that will hold (the governments) accountable,” he argued.

The total number of beneficiaries of the PVL has gone down from 2.9 million in 2004 to 2.7 million in 2009.

“We have even found that sugar is widely used to increase the calories, in an attempt to meet the requirements,” Luis Felipe Vega, the Comptroller General’s Office adviser on social programmes, told IPS.

“The rations are supposed to be made up of two or more food products, to reach the established nutritional values, but instead of that, they increase the sugar. As a result, we’ll have children who are fat but undernourished. And worst of all, they’ll have learning problems,” he said.

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