Agricultural producers report that the smuggling of corn from Mexico has increased in recent years, and it is estimated that currently the consumption of grain entering illegally accounts for 25% of total demand.
Tuesday, October 1, 2019
According to farmers, smuggled corn competes unfairly with local production, since in Mexico producers enjoy tax exemptions and state subsidies.
Gustavo Rivas, a farmer who is part of the National Association of Basic Grains (Anagrab), explained to Prensalibre.com that "... the areas where corn was grown were reduced between 25 and 30% in the last three years, which is worrying since today the sector generates 207,83 direct jobs. The decrease in grain production because of unfair competition from smuggled produce has caused whole plots are now abandoned or owners have rented them for other uses."
According to Rivas, to make local production competitive, it requires access to soft credits, markets and technology, a situation that would allow them to increase yields per cultivated apple, something that farmers already have in Mexico and Honduras.
Luis Mazariegos, a member of the Contraband Observatory of the Food and Beverage Union, said that "... the corn problem must be approached from the perspective of food security because fewer and fewer producers find it profitable to dedicate themselves to this sowing when the grain is fundamental to the Guatemalan diet since it is the main source of carbohydrates. The entry of Mexican corn illegally has already monopolized 25% of the total grain in the national market, i.e. more than 10 million quintals consumed by Guatemalans is smuggled which is also a health problem."
According to reports from CentralAmericaData, during 2018 the main buyer according to the imported value of corn in Central America continued to be Guatemala with $236 million, followed by Costa Rica with $175 million, El Salvador with $137 million, Honduras with $127 million, Panama with $101 million and Nicaragua with $46 million.
Because yellow corn is imported from the United States at a price of $11 per quintal in Nicaragua and the cost of producing a quintal of sorghum locally is $12.5, competition for local producers is nearly impossible.
Nicaragua is part of the Dominican Republic-Central America-United States Free Trade Agreement, an agreement that allows yellow corn from the United States to enter the local market free of tariffs.
Although the volume of corn, beans, and rice harvested is projected to increase in El Salvador by 2020, producers' expectations are not encouraging, since prices have fallen to levels insufficient to cover costs due to the import of basic grains.
Forecasts by the Ministry of Agriculture and Livestock (MAG) indicate that this year the country's corn harvest will grow by 11%, beans by 30% and rice by 20%.
Between February 2013 and December 2017, the average price of a kilo of corn imported into Guatemala has been on a downward path, falling from $0.43 to $0.19.
Figures from the information system on the the Corn Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Despite losses due to the heavy rains, an agricultural association of basic grains producers has assured corn supplies.
For the forthcoming harvest, 12.9 million hundredweight of corn production is predicted.
The president of the Honduran National Association of Basic Grain Producers (Prograno in Spanish), Luis Donaire, told La Tribuna that they, "do not expect problems due to the floods last month or due to the heavy rain that may fall in September and October".
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