Striking farmers in Colombia say free trade agreements are responsible for their woes. Better to look closer to home, including industrial cartels and all the contraband entering the country.
BOGOTA — Colombia has signed a string of free trade agreements in recent years: with Canada in August 2011, with the U.S. in May 2012, and with the European Union just a month ago.
All these agreements, without exception, provide for reductions to the duty paid on agricultural goods. But these cuts have not been implemented yet. The vast majority of our products currently enjoy the same protections that they have for decades, and they will continue to enjoy these for up to 17 years in some cases.
When the time comes for them to be applied, the free trade agreements will have their winners and their losers, but they are not responsible for the problems our farmers are facing today. They are nothing more than a useful scapegoat that does little to help our struggling agriculture producers.
Farmers, whose strikes have paralyzed the country in recent weeks, are complaining about the cost of materials and fertilizers, and they’re right. But fighting against the prices is tough when four large importers control the market. Why should these companies compete with each other and push prices down if they can simply agree to fix prices at certain levels?
These importers are the first link in the chain. Then there are the wholesalers, followed by the retailers. If the farm is a long way from the town center, there might be a second or third stop in the supply chain, and the number of businesses taking a cut before the product reaches the farmer has already hit a minimum of four.
It is difficult to stay afloat when material and fertilizers cost so much, but it is even more difficult to explain how it is possible that during this crisis no one has so much as mentioned the Department for Industry and Commerce. Its director, Pablo Felipe Robledo, should be held accountable.
Bikes and boats?
Farmers are also complaining about contraband and, once again, they’re right. The director of the Colombian Revenue and Customs organization (DIAN), Juan Ricardo Ortega, has confirmed the problem and characterized the situation as serious. On the rice market alone, 80,000 tons of contraband is crossing the border from Ecuador into Colombia. That load cannot be carried across the border by bicycle or boat, nor by illegal vans: Some 2,000 trucks would be needed to transport it all.
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Not all roses for Colombia's agriculture industry (Jhon Paz/Xinhua/ZUMA)
The deterioration of our border agencies is deep-rooted, far-reaching and very dangerous. Four inspectors have already died. Ortega has asked for support, but both public opinion and the government have ignored his requests. Could it be that it’s not in the governing party’s interest to confront certain aspects of the problem? It clearly takes more than just a few bribes to smuggle in so many tons.
And finally, the farmers know that they aren’t competitive and need help. This means that they need good roads, because it’s costly to transport their products. They need support to carry out pesticide controls, to implement new techniques, to improve their training. And above all, they need credit. Colombia must start thinking — and quickly — about how to develop its infrastructure to match that of Ecuador and Peru, how to obtain the money to support the Inter-American Institute for Cooperation on Agriculture, and how to finance the Rural Development with Equity program, the new face of the disgraced Secure Agricultural Income initiative. The latter may have fallen into disrepute, but that doesn’t mean that we don’t need a subsidy program to do more than just reactively fight problems.
Colombia must stop blaming the free trade agreements and urgently address the problems caused by both long, unwieldy distribution chains and contraband entering the country. These are issues that could be resolved in less than a year, if the desire to address them is there.
If we don’t take the giant step from artisanal production to industrialized agriculture, no farm will be able to cope without government subsidies. Falling into the trap of hysteria and bad-mouthing free trade will not help our farmers in the slightest.