This week the inflation data for April will be known, and while the Bank of the Republic continues with its rate increase to curb the rise in prices – last week it reached 6% – the measures that the government has taken to support agro-industrial producers They still don’t seem to have the expected effect.
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Within the government’s package of actions, one of the direct measures for the sector’s inputs has been the reduction of import tariffs on inputs. With Decree 307 in March, a 0% tariff was established for six months for 165 goods, among which are various supplies for the sector, and to this is added another announcement in April, of a 0% tariff for 12 months for another 39 agricultural inputs.
In addition, the Government has expanded the beneficiary population of the Solidarity Income program, which already covers 4 million households, and from this month increased his monthly draft to $200,000.
The producers
Such is the case of potato crops, the product that registers the highest inflation of the last year, and that for March showed an increase of 110%.
Germán Palacio, president of Fedepapa, points out how “The potato is intensive in the use of fertilizers and agrochemicals. Urea and fertilizers did not have tariffs, so this measure is not noticeable. It is very well intentioned, but it is important to lower the price”, he indicates.
The president of the union points out how with the pandemic, with the closure of hotels, restaurants and cafeterias, the tuber dropped to maximum levels. At that time the governmentor injected $30,000 million into the sector. But the global situation due to the container crisis, plus the strike a year ago, which affected the supply of the product, have not allowed prices to decline.
“We haven’t had any help so far this year,” Palacio also says. “You cannot be ungrateful, but this is not temporary, the agricultural sector suffers from a problem, prices drop, they give us subsidies, but it is a structural issue, we must look at how to make growers more productive, increase seed consumption certified, give greater access to credit and greater legal certainty”.
In addition, Palacio assures that 80% of potato growers they are small producers, “people without the financial muscle”, and that many stopped cultivating, which will mean that prices remain high at least until July, when the harvest of the center of the country, the largest of the year, comes out.
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The Banana is the third most inflated product, after potatoes and cassava (85.1%), with an increase in prices of 82.5% in the last year according to Dane. There, José Francisco Zúñiga, president of the Association of Banana Growers of Magdalena and La Guajira (Asbama), points out that “bananas and plantains have become more expensive like other products in the family basket because they are more expensive to produce.”
According to Zúñiga, banana and plantain production in the north of the country represents exports of US$330 million, but throughout the emergency it has been affected by the high prices of inputs.
“Fertilizations are costing three times as much, the first affected were the small producers, but the big ones also have problems, and that lowers production”, he assures. Regarding the tariffs, Zúñiga said that there are currently stocks of products that were already subject to the tariff and defining its real effect could take months.
“What can help us today is VAT exemptions on products that are commonly used, and if we could have subsidies it would be extremely important for fertilization and fumigation. We celebrate all the efforts that the government makes, but we need more aggressive measures, ”he assures.
Another product that has seen significant increases in its prices is the chicken, with an annual inflation of 25.7%, while eggs have risen 31.9%. Gonzalo Moreno, president of Fenavi, acknowledges that at this time there is “the highest production of chicken in history”, with 1.7 million tons of meat in 2021, but despite this, the pressures in the costs.
“We are totally uncertain about what might happen to the price of chicken and eggs, because it is the global framework conditions that are determining the price today. In Colombia it is due to an increase in the demand for a substitution of other proteins of animal origin. Likewise, the cost of raw materials worldwide has escalated due to the war in Ukraine and RussiaMoreno said.
The AIDS
Juan Gonzalo Botero, Deputy Minister of Agricultural Affairsassured that the government has been working on a four-pillar strategy. “We have experienced the support policy in several stages, with a first to guarantee the supply of fertilizers throughout the year, for which diplomacy has been carried out with the embassies of Canada, Trinidad and Tobago and the United Arab Emirates to ensure the availability of urea” , he indicated.
“The tariffs of all the raw materials of fertilizers, of the agrochemicals that are imported, were reduced, although they do not have an immediate effect, we hope that they have repercussion“, said.
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He also assured that the operator of the Fund for Access to Agricultural Inputs has been regulated and is in the process of contracting, which will be able tor Incentives for transportation subsidies, acquisition and production of inputs and should start functions in the month of June.
“Finally, all the production processes were involved in the special lines of credit, which today have subsidized rates,” he assured.
LAURA LUCIA BECERRA ELEJALDE
