Opinion: The Colombian peace deal and produce exports

December 23 , 2016

By Andes Fruits Colombia GM Matt Aaron

matt-aaronIn the ever-changing landscape of world agriculture, Colombia is one of the most volatile countries. Personnel shortages habitually occur during the Christmas and Easter seasons, making it difficult to ship fruit.

Colombia has arguably the most expensive domestic logistics costs in the Andean region. Sending a container by truck from the interior of the country to the coast can be more expensive than sending the same container from the port to another continent.

Earlier in 2016, like most of the past 10 years, there was a 45-day truckers strike.

Idiosyncrasies in Colombian business cause delays in getting our products to produce buyers in the United States and Europe. When the fruit is late, we often get the question: “What the heck is going on down there?”

As much as we try to explain all of the intricacies of Colombia, buyers are busy and don’t have time for a long explanation. The answer often ends up with an informal “Dude, Colombia is nuts. Please bear with me.”

With many forces at play, it is not a simple answer to explain all of the chaos. But the root cause is straightforward: The state of Colombia has been at war with leftist guerrilla groups since the 1960s.

The country’s agriculture industry has struggled, crippled by decades of violence and land grabbing. A lack of safety and opportunity has displaced farmers from all parts of the country.

Poor infrastructure, low investment, heavy corruption and technical know-how have held back Colombia on the international stage.

A major source of income for the guerrillas has been cocaine. Production and trafficking of the drug has helped fund them over the years.

In an effort to stop the guerrillas, right-wing paramilitary groups were formed. Over time, they have become another set of violent criminals and drug traffickers wreaking havoc across the country.

In addition to crime, poverty is another major issue. Colombia is ranked near the top in world income inequality studies.

The peace deal

In a year magnified by inaccurate polls and predictions for major world events like Brexit and the U.S. election, Colombia also had an important vote. To end the war.

The plebiscite, a citizens’ vote on a peace deal with the FARC was put forth to the people by President Juan Manuel Santos. “Yes” to accept the terms, “No” to continue the conflict.

The vote for peace was expected to easily get more “yes” votes. Then Oct. 2 rolled around and “No” won. Barely.

Since then, Santos, Nobel prize in hand, restructured the deal. This time, he skipped the citizens’ vote and got it passed by congress.

The peace process will go into effect after all. Yet, it lacks a majority support from the citizens. This is another major problem in Colombia: lack of trust.

And it does not stop with politicians and guerrillas. There are major trust issues among the people in everyday life and business.

The trust issues have spread internationally. Colombians do not have the best reputation in the produce industry. Can the peace deal help change that?

Pros of the deal

As the peace process finalizes, there is excitement about the potential of Colombian fruit exports.

According to the Ministry of Agriculture, key U.S. agricultural companies have expressed an interest to invest in Colombia. A peace deal would be a huge plus in finalizing them.

“Some immediate/short term benefits are increased investor confidence and international awareness for Colombian agriculture”, noted Ángela Delgado Castillo, author of ‘Colombian Agribusiness after FARC peace deals’ published by the Agribusiness Intelligence Division at Informa.

The peace deal will put emphasis on improving access to the rural parts of Colombia.

“The National Infrastructure Agency is planning on pushing forward the ‘vías terciaras’ (tertiary roads) project, which will create immediate jobs for ex-FARC rebels and improve agribusiness logistics,” added Delgado.

Colombia remains the most biodiverse country in the world per square-mile. Passion fruits, nutrient dense superfruits like dragon fruits, acai, cupoazú, camu camu, and goldenberries are oozing with worldwide export potential.

It also has more than 22 million hectares of arable land, with 17 million hectares yet to be cultivated. Colombia possesses ports on both the Atlantic and Pacific coasts, an advantage over its neighbors in Peru and Ecuador.

Difficulties remain

The FARC are not the only problem that Colombia faces. Far from it. Land rights, the drug war, and tax reform must also be addressed.

In rural areas, Colombians are reeling from effects of the war. While the FARC are the largest, guerrilla groups like the ELN and AUC remain in the mountains and jungle.

Will one of groups step in to fill the void left by a demobilized FARC?

The peace deal guarantees the FARC at least 10 seats in the Colombian congress. How will their political influence affect the country?

FARC members will face the tall task to reintegrate with the Colombian general population.

In addition, trading illicit crops (coca) for legal crops, it is vital to maintain comparable wages for the farmers. Exotic fruits may be the answer here.

The peace process will take time to show effects. To see an impact it could take 5-10 years. Many things will need to go right.

I believe that the improved reputation of Colombia, the increases in infrastructure and investment, and the vast amount of agricultural potential will outweigh the legitimate risks and help Colombia both as a nation and a fruit exporter.

To end a 50+ year war, a peace deal is a risk worth taking.

Matt Aaron is a fruit exporter at Andes Fruits Colombia and host of the Food Startups Podcast.

The report by Ángela Delgado Castillo ”Colombian Agribusiness after FARC peace deals: Primary commodities; Agricultural policies; Trade and institutions” can be found here.

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