Colombian government announces new investments for the countryside’s competitiveness
For a ten years period ending in 2031, the Colombian government will invest EUR 22 billion according to 16 sectorial plans through which it seeks to transform the countryside with rural education, housing, productive infrastructure (water and sanitation) and technology, and agro-logistics (new road access and connectivity). For 2021, EUR 9.08 million will be invested through 81 projects led by 32 national entities, especially the Ministry of Agriculture and Rural Development which will use these plans as a roadmap for the coming years. The priority sector will be rural education with 44% of the total investment, followed by infrastructure and land property access (20.5%), agricultural production and social economy (16.45%), and water and housing (6.5%).
One of the promising initiatives of the Ministry of Agriculture is to design proposal to set up four (4) Productive Ordering Plans all over the country, which aim to organize growers and concentrate the agricultural production around prioritized areas (yet to be defined) from where both national and international market could be attended. Three main activities were proposed to embrace this initiative: a) “Contract farming” consisting of a scheme for linking growers to markets through previously negotiated sales to industries and supermarkets, b) Trade defense of FTA’s taking advantage of the commercial agreements signed by the country, and c) Agribusiness clusters to group investment funds (public and private resources) around infrastructure and logistics investment. With this interest to define four Agribusiness clusters, the Ministry of Agriculture has prioritized specific value chains such as avocado, cotton, rice, banana, onion, cocoa, corn, sugar cane, dairy products, cattle and pork farming, aquaculture and other fruits. Furthermore, by defining an efficient agricultural frontier through a national ordering plan, access to land for productive purposes will become a cross-cutting priority for the aforementioned objectives’ fulfillment.
In Colombia, credits and financing programs are usually oriented to people with enough financial capacity to pay the loan, therefore, aiming at closing the gap between this group and people without enough financial capacity, the national government will implement additional strategies such as credits with alternative financing schemes mainly addressed to small holders.
A proposal for restructuring the Colombian Agricultural Institute – ICA through changes in the plant personnel and their functions, as well as strengthening institutional capacity with additional budget, is another highlighted initiative related to SPS matters. This proposal aims at guaranteeing a national animal health status and safety policy implementation to declare free zones from diseases such as Huanglongbing – HLB, brucellosis, Newcastle, swine fever, foot-and-mouth disease and fruit fly - Ceratitis Capitata Wied.
By improving the sanitary status and overcoming the main obstacles in agro-logistics matters, the Government expects to recover the economy from the negative effects due to the COVID-19 pandemic. The economy is already showing signs of recovery. According to the latest report on foreign trade of the National Statistics Bureau (DANE), agro exports in May were equal to USD 688.7 million and reached pre-pandemic figures which represent a growth of 12.2% compared to 2020. As you can see in the image below, the agricultural products, food and beverages accounted for a high percentage of this increase. This was mainly explained by the increase in exports of cut flowers and foliage (48.3%) while bananas and palm oil were also relevant products with a significant contribution of 19.9% and 11.3%, respectively.
In conclusion, taking into account that the export levels of 2021 have already surpassed those levels reached in 2019 during the same period, together with the investment announced by the Colombian government for the next few years, a promising economic reactivation is foreseen after the effects of the pandemic.