In order for Guatemalan producers to compete under the same conditions as neighboring countries, the government is preparing a bill that seeks to exempt agricultural inputs from VAT.
The initiative, known as the "Fiscal Equity Law", is being prepared by the Ministry of Agriculture, Livestock and Food (Maga), because, according to the institution's top official, other Central American countries do not charge value-added tax (VAT) on agricultural inputs.
Authorities from both countries defined the actions they must execute in terms of sanitary requirements, so that Panama can start exporting products such as pineapple, beef, coffee and cocoa, among others, to Israel.
The entry of these Panamanian products to the Israeli market is within the framework of the Free Trade Agreement between the two economies, which was signed in May 2018 and ratified by the National Assembly of Panama in October 2019.
For agricultural producers, the use of precision biotechnology in Guatemala requires a specialized committee so that the authorities' decisions are based on technical and scientific evidence, and not under the influence of political or ideological interests.
Guatemala already has regulations in this area, since on October 1, 2019, the regulatory framework signed by the Ministry of Economy with its counterparts in El Salvador and Honduras came into effect.
In Nicaragua, businessmen claim that since June last year, 28 properties in different parts of the country are still taken by groups of people related to the Ortega regime.
According to the Union of Agricultural Producers of Nicaragua (Upanic), the 28 properties located in seven departments of the country, together represent 4,615 manzanas.
In Panama, President Cortizo sanctioned the Law that establishes that from 2024, 100% of the resources retained by the Special Interest Compensation Fund will go to the agricultural sector.
The National Assembly approved a bill that establishes that by 2024, 100% of the resources retained by the Special Interest Compensation Fund will go to the agricultural sector.
The Special Interest Compensation Fund (Fondo Especial de Compensación de Intereses, FECI) is fed by the 1% tax levied on the granting of all loans exceeding five thousand dollars in both commercial and consumer banks.
The average tariff applied to imports of agricultural products in Costa Rica is 14.1%, while for imported industrial goods, the levy is 5.6%.
The Trade Policy Review of Costa Rica, prepared by the World Trade Organization (WTO), specifies that sausages and similar products are some of the imports on which the highest tariffs have been imposed.
Because the area of stolen land in Guatemala has grown from about 10,000 hectares in the 1990s to 164,000 in 2018, losses in agricultural production caused by this phenomenon reached nearly $650 million last year.
The Chamber of Agriculture (Camagro) estimates that only in 2018, invasions of private property, mainly agricultural production farms, generated a negative impact equivalent to 0.6% of Gross Domestic Product.
The government announced that in the next few days it plans to make outstanding payments of $14 million to producers of basic grains and Grade C milk, and also that some $25 million will be invested in sector programs.
In rice, $9.7 million will be disbursed to 143 producers, in grade C milk more than 2,000 producers will receive $1.2 million, in corn some 194 producers will receive $1.8 million, and in soft loans 2.6 million balboas will be paid to 136 producers of corn, beans, palm, fishing, watermelon, melon and rice, informed the Ministry of Agricultural Development.
In Panama, decades ago the production of the sector represented 25% of the GDP, however, today this proportion barely reaches 2%, which is attributed to increased food imports and low soil productivity, among other factors.
Panamanian agricultural producers have been reporting difficulties in their activity for several years.
Between the first semester of 2018 and the same period of 2019, the volume sold of fertilizers and agrochemicals fell by 13%, a decrease explained by the political crisis reported since April last year.
Figures estimated by the Association of Formulators and Distributors of Agrochemicals (Anifoda), specify that this is the second year that decreases in sales are reported, because between the first half of 2017 and the same period of 2018, the volume of fertilizer sold fell by 5%, falling from 110 thousand tons to 104 thousand tons.
In the last two years, non-performing loans to the agricultural sector increased from 2.4% to 5.9% between April 2017 and the same month in 2019.
Figures from the General Superintendence of Financial Entities (Sugef) indicate that the increase reported in the arrears of agricultural loans includes operations with delays of more than 90 days, as well as operations that are in judicial collection.
Guatemalan Foragro, manufacturer of insecticides, fungicides and herbicides, opened a branch in Panama and aims in the short term to position 50 products in the local market.
The company reported that for the opening of its branch in the Panamanian market invested $300,000 and that this would have a presence in all Central American countries, as they already operate in El Salvador, Honduras, Nicaragua and Costa Rica.
Developing strategic crops to ensure food security and bringing together agricultural agents to focus on foreign market niches is part of the challenge for the coming years.
One of the great challenges faced by businessmen in Panama is to take advantage of the country's logistical opportunities to position the Panamanian economy as an agro-exporter and also as a re-exporter of food.
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