Colombia’s protests could take to losses higher than USD 457 million for the agricultural sector
Anti-government protests in Colombia, which started back in 2019, were resumed last 28th of April. This year, the massive demonstrations were triggered by a tax and health reforms proposed by the government of President Iván Duque which would in practice increase taxes and costs of living as poverty rates and food insecurity are on the rise. In fact, according to the Colombian Statistics Bureau 1,7 million Colombian households don´t have access to three meals a day as a consequence of the Covid-19 pandemic. This article presents the impact of the demonstrations and roads’ blockades on the agricultural sector and food supply in Colombia.
The Covid-19 pandemic, in combination with unmet demands from the previous demonstrations of 2019 and the announcement of governmental reforms detrimental to Colombians livelihoods, led to the current social unrest that motivated people to, once again, take the streets in different cities. Even though the government withdrew its proposed tax plan and agreed to meet protest leaders, more and different groups are joining the continuous protests. Dozens of people have died as a result of the clashes between civilians and the police. Furthermore, the demands of protestors on the streets have widened and a short-term resolution seems unlikely.
Although, according to the Colombian Minister of Agriculture and Rural Development, Rodolfo Zea, the agricultural sector grew 3,3% during the first quarter of 2021, the forecasts for the second quarter are not so promising. Demonstrators have blocked key roads resulting in shortages of goods (fuel, feed and food among others) in areas like Valle del Cauca and Meta, two of Colombia’s agricultural powerhouses. In consequence, Colombia’s protests may result in losses higher than USD 457 million for the agricultural sector and 700.000 tons of agri-food products could not reach their destination markets.
Impact on the agricultural sector
The Colombian Society of Agricultural Producers (SAC for its abbreviation in Spanish) has consolidated the following information on the impact of the demonstrations and blockades per sector:
Fruits and vegetables
This sector has reported affectations for more than 171 small producers associations or cooperatives in around 200 municipalities. It is estimated that the blockades have put at risk the transport of more than 5.500 tons of fruits and vegetables.
Hass avocado is a growing sector exploiting opportunities in foreign markets. As a result of the blockades and demonstrations 65 containers with around 1.495 tons of this product could not reach the ports. Therefore, losses are projected to reach up to USD 3,9 million.
Rice cultivation has been mainly affected by the lack of fertilizers and pesticides, and machinery fuel to carry out the applications of inputs due to the blockages. As the sowing season takes place between March and April, SAC states that around 1,2 tons of rice may not be produced.
Banana is one of the main exported fruits from Colombian to markets like the European Union. This sector reports that 15.000 tons of the fruit could not be exported and losses ascend to approximately USD 5,4 million.
Colombia’s best seller among agricultural products in foreign markets is one of the most affected by the strikes and demonstrations. The operations of the entire supply chain have stopped. An estimated of average weekly losses equal to USD 65 million is foreseen.
Trout and Tilapia
If the blockades are maintained, the guild calculates losses of 3.214 weekly tons of fish due to shortage of animal feed. Likewise, USD 90 million of exports are at risk. More than 200.000 direct and indirect jobs may suffer from this impact.
Poultry protein (eggs and chicken meat) are the most affordable animal origin proteins in the country. This sector, on which around 350.000 families rely on, has been one of the most affected. More than 120 million birds are at risk of death due to animal feed shortages, in fact, more than 10 million birds have already died because of this situation. Near 60 thousand tons of blocked poultry feed, thousands of trays and other inputs have not been able to reach the production farms. Furthermore, 20.000 thousand tons of chicken meat and 180 million eggs have suffered from distribution problems.
The pork industry faces similar challenges to the poultry sector. In fact, the most affected areas are: Valle del Cauca, Cauca, Nariño, Cundinamarca, Meta and Eje Cafetero, which concentrate 55% of pork production in the country. In the most affected regions, an inventory of 3.750.000 heads is at risk to die or weight loss due to lack of animal feed. In addition, due to roads’ blockades, more than 33.000 pigs remain stuck in the farms generating extra costs that reach already around USD 270.000.
The current situation has affected the entire supply chain, from primary producers who cannot sell milk, to transporters, processing plants’ workers, commercialisers and final consumers. As a consequence of the demonstrations and roads’ blockades, the dairy processing industry has had to stop its production because of milk for processing shortages. If this situation continues, companies could close their facilities and thousands of people who work in the industry could lose their jobs. Estimated losses ascend up to nearly USD 7 million.
Valle del Cauca, one of the most affected regions by the demonstrations and blockades, is the main producer of sugar cane in the country. Sugar cane is cultivated to produce not only sugar but also ethanol and energy. Calculated losses account for around USD 32 million.
This situation urges the Colombian government to reach agreements with the different sectors and find alternative solutions to, on the one hand, find funds to diminish the fiscal deficit of the Colombian State and, on the other, meet the needs and demands of the Colombian people.
Author: Andrés Santana Bonilla