Colombia - Agriculture Briefing

Submitted by: Bob Prather ,
Marketing Services Division

Background

Before 1991, the Colombian market was largely closed to most commodities as the government pressed a basic policy of food self-sufficiency. After 1991 Colombia started with the virtual elimination of import quotas, a reduction in import tariffs and improvements in import licensing procedures. Colombia's agricultural sector continues to move from a protectionist government regime that allowed inefficient production to flourish to an open system that compels domestic producers to compete openly with foreign suppliers. Key elements of the Colombian economy, most notably agriculture, are coping with the loss of production subsidies and the introduction of competing imported products.

Although the government has tried to soften the impact of the structural changes, its message has been consistent: Colombian agriculture must adapt to find its competitive position in a global environment.

The decision to eliminate the protective cover that once shielded Colombian agriculture from the world community has compelled the nation to redirect toward commodities in which it enjoys a comparative advantage. Clearly, the climate and topography of Colombia are not well-suited for grain and oilseed crops. The move away from grain, oilseed and cotton cultivation to perennial crops and livestock production is underway.

Colombia, however, is well suited to produce coffee, cut flowers, sugarcane, bananas, other specialized fruits and vegetables and African oil palm. Land previously devoted to field crops is being redirected to livestock production.

Grain imports (largely consisting of corn, wheat, rice and barley) have increased steadily. Oilseed imports (mostly soybeans) increased as well. As a result of the growth in imports and a downward trend in domestic production, Colombia's overall food self-sufficiency ratio fell from 95 percent in 1990 to 84 percent in 1996.

Colombian importers are continually on the prowl for new products to offer consumers. In the last half dozen years since imports were first allowed by the Colombian government, there has been a dramatic increase in the number of firms handling the food import business and in import product diversity.

Current situation

1998 Alberta exports to Columbia in million C$

Wheat	21.7
Dried beans	2.3
Dried peas	1.9
Other (oat products, millet, lentils, alfalfa pellets, seeds, beef offals)	1.4
TOTAL	27.3

1998Alberta imports from Columbia in million C$

Coffee	13.7
Bananas	1.3
Cut flowers	.4
TOTAL	15.9

In 1998, Alberta exported C$27.3 million of agri-food products (25% of Canadian agri-food exports to Colombia) and consisted mainly of wheat (C$37.8 million), dried beans, malt and dried peas. Alberta's total agri-food imports from Columbia were limited to C$15.9 million in the same year and were comprised primarily of coffee and fresh bananas.

Total imports of processed food products were estimated at over $ 1 billion for 1997, led by the USA with 28%, followed by Venezuela, Chile and Ecuador. While many food products are made locally , imported products, especially from North America, have found easy access on account of quality, price and packaging.

Opportunities