Tariff Reduction Worries Livestock Breeders

The tariff for condensed milk will drop from 155% to 30%, worrying Panamanian milk producers.

Thursday, July 30, 2009

Eucilides Días, head of the National Livestock Breeders Association, known as ANAGAN, said the measure will cause unemployment across all the production chain.

"But Victor Pérez, Agricultural Development Minister, considers that 'there is nothing to be afraid of'", reports newspaper La Estrella. "Regarding condensed milk, the official said that more competition is sought, because nowadays there is only one company marketing the product. He explained that only 4 million liters of milk could be affected, 2% of the national production".

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Costa Rica: Dairy Industry Booming

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The total amount of exported kilos of milk rose from 76 million in 2013 to 92 million in 2014, with the number one destination being Central America, mainly Guatemala and El Salvador.

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Panama: Dairy Industry Against Reduced Tariffs

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The food and beverage industry has protested over the lowering of import tariffs for evaporated milk powder, mozzarella cheese and cheese for melting.

Prensa.com reports that "Through the Cabinet Decree No. 37 of 9 October 2012, the administration of Ricardo Martinelli reduced the import tariff on evaporated milk from 155% to 30%.

Milk: from Shortage to Excess

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A year ago, milk was scarce in Costa Rica. Nowadays production is above demand, driving prices down.

In the past, many producers invested to increase their output. They now see a drop in demand, specially in milk derivatives, caused by the international crisis.

Exporting this oversupply is not an practical option, as production costs are higher than traditional dairy producers like Argentina, Uruguay or Paraguay.

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