In order to take advantage of the potential of the Nicaraguan livestock industry, it is essential that traceability systems be improved, a prerequisite for entering demanding markets such as Europe.
The growth in exports of meat and meat products from Nicaragua could be even greater if product monitoring and control systems were properly implemented throughout the production chain.The European market is one of the most demanding in this regard, and is one of the most profitable once the necessary traceability systems are implemented.
In Nicaragua industrialists are preparing to defend against the denouncement by farmers over discrepancies between the prices paid by local abattoirs and international prices.
In Nicaragua the slow pace of implementation of the system is preventing the livestock sector from make the most of the beef export quota established by the Agreement with the EU.
The 2083 tonnes of beef which the livestock sector in Nicaragua could sell to the European market is not being fully leveraged due to the fact that they do not have the required minimum records demanded by European law to allow the importation of products.
In 2015 a 15% increase in the volume of milk exported offset the fall in international prices of meat and the recurring problem of smuggling in the sector.
Although meat is still the leading export sector in Nicaragua, the country's foreign exchange earnings fell by 1.6%, going from $474.8 million in 2014 to $467 million in 2015. This information was disclosed by the Nicaraguan Chamber of Beef Exporting Plants (Canicarne).
A pilot project aims to provide funding and technical assistance to a group of food producers in order to improve their livestock and increase quality.
The purpose of the project, still in its test phase, is for farmers to use the same milk extracted from cows to feed calves instead of selling it at low prices in the local market. The plan includes providing technical assistance to implement traceability plans and in this way increase the possibility of exporting meat to EU markets.
The commissioning of the plant belonging to the Mexican SuKarne has once again brought to the fore the problem of smuggling of live cattle both to Costa Rica and to Honduras.
An article in Elnuevodiario.com.ni reports that "... Canicarne's executive director, Onel Perez, insisted that the problem of livestock [smuggling] not only affects meat processing plants, but will also have effects on employment in newly set up processing plants, the price of meat for consumers, and livestock taken as a whole. "
While in Panama a company can send a container abroad in 10 days, in Nicaragua the process takes 21 days.
Of all the countries in the region Nicaragua is the place where exporting or importing goods takes the longest, significantly increasing the cost of these commercial operations, said the Doing Business report issued by the World Bank (WB).
The cost stated in the report "does not include the payment for freight, which usually varies depending on the final destination of the cargo. In this, according to the WB, are all the costs associated with the completion of the procedures which have to be undertaken for exporting or importing goods. "This includes documentation costs, administrative fees for customs clearance and inspection, customs broker fees, port charges and inland transport costs, among other things." It even incorporates the cost of bribes which sometimes occur in the process of obtaining a document. "
The main factors are a herd of 5.8 million head of cattle, programs which give impetus to the activity, and the opportunities provided by the AA with the EU.
According to breeders and industry to date number of cattle could be higher than that amount recorded in the IV National Agricultural Census (4.2 million head). Onel Pérez, executive director of the Nicaraguan Chamber of Beef Exports (Canicarne) , currently estimated that the herd could be 5.8 million head.
Canicarne is demanding the repeal of the decree which establishes a fixed price of $250 for cattle weighing between 250 and 350 kilos, which favors the export of live cattle.
According to the Nicaraguan Chamber of Beef Exports (Canicarne), slaughterhouses are working at half capacity and demanding the repeal of the interministerial Mific-Magfor Decree 027-2007, believing that it encourages tax evasion in live cattle exports.
Restrictions by Honduras, Guatemala and Panama on Nicaraguan beef exports have caused a reduction in revenues of about $60 million for exporters, who are demanding reciprocal measures to those countries.
Since 2010, Nicaraguan farmers have failed to collect about $60 million in profit due to the restrictions imposed by the authorities of Honduras, Panama and Guatemala on importing meat from Nicaragua, said industry leaders in the El Nuevo Diario.
Meat processing plants foresee slaughtering 250,000 more cattle by 2014, a 38% increase.
Onel Pérez, president of the Nicaraguan Chamber of Beef Exporters (Canicarne), noted that they expect to slaughter 650,000 animals in 2010, out of a maximum capacity of 1.1 million in the country's 4 processing plants.
Pérez remarked that 'certified slaughterhouses have made considerable investments to handle the expected increase'.
The Nicaraguan Chamber of Meat Trade is looking to expand beef exports in 3,000 additional tons.
The president of the National Cattlemen Nicaragua (Conago), René Blandon stated that if successful, beef exports to that country would reach 22 tons per year.
"Conago also hopes to improve the livestock value. Blandon said that 'the price they are paying in Venezuela, which is $ 1.30 per kilo, is better than other markets including Central America and Puerto Rico. That makes it attractive and stimulates the small farmer," stressed Blandon, according to La Prensa.
The cattle farming sector requires a $40 million investment over five years in order to implement the national traceability program.
Nicaraguan cattle farming association (CONAGAN), the Association of Producers and Exporters (APEN) and the Chamber of Meat Producers (Canicarne) are collaborating on a search for a cheaper alternative to the program.
CONAGAN president, René Blandón, told Elnuevodiario.com.ni that, "there are various proposals with the Ministry of Forestry and Farming (Magfor), one of which is to trace animals when they arrive for slaughter while in another it would be done when they are still on the farms. What is sought is an appropriate way to trace animals in Nicaragua, while acknowledging that we do not have many resources at our disposal".
Authorities have agreed with their Panamanian counterparts to seek ways to make it easier for Nicaraguan meat to gain access to Panama's market.
Nicaraguan cattle farmers believe that the current auction system discriminates against them and fails to reflect market conditions.
"The president of the Nicaraguan Chamber of Meat Producers (Canicarne), Onel Pérez, claims that the auction mechanism is inappropriate and lacks transparency as well as not suiting Nicaragua, which produces around 25 different cuts with varying customs tariffs," reports Elnuevodiario.com.
Next week, Nicaragua and Guatemala could resolve their differences, allowing the former to resume shipping meat and dairy products to the latter.
Onel Pérez, president of the Nicaraguan Meat Chamber (CANICARNE), explained that the trip to Guatemala undertaken by Nicaragua’s commerce minister Orlando Solórzano will be key for solving this conflict.
“In turn, Wilmer Fernández, president of the Nicaraguan Dairy Chamber (CANISLAC), casts doubts over the resolution of the conflict. He argued that the same happened months ago, the sides promised to solve the situation, but the barriers for Nicaraguan production were put back in place shortly afterward”, reported Elnuevodiario.com.