TBY talks to Juan Camilo Restrepo, Minister of Agriculture & Rural Development, on the impact of FTAs, boosting crop production, and rural development.

Juan Camilo Restrepo
Juan Camilo Restrepo was born in 1946 and attended Javeriana University, studying Legal Sciences. He later studied Administrative Law at Paris University and Economic Law at the London School of Economics. Before becoming Minister of Agriculture and Rural Development, he was Colombia’s Ambassador to France. He has worked in various other public positions, and is active in academia.

Colombian flowers and coffee are well recognized worldwide. What other main export products and markets are being targeted?

The internationalization of Colombian agricultural goods began long ago. The country has signed trade agreements with several countries and blocs: MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay), Mexico, the Northern Triangle (El Salvador, Guatemala, and Honduras), CAN (Bolivia, Peru, and Ecuador), Chile, Canada, Cuba, Venezuela, the European Free Trade Association (EFTA), and others. However, the free trade agreement (FTA) with the US, signed in May 2012, is perhaps the most significant commercial step for us. Colombia increased export volumes to the US by more than 20% in the first 11 months of the year from 460,000 tons in 2011 to 553,000 tons in 2012, mainly due to sugar and confectionery exports, (+154%), bananas (+17%), and coffee (+30%). The main agricultural trade partners of Colombia are Belgium, the UK, Germany, the US, Brazil, Ecuador, and Venezuela. Traditional products—bananas, coffee, flowers, sugar, and tobacco—represent on average about 77% of our total exports, and in the last five years we reported an average annual growth of 8%. Henceforth, our future goals are to create the right conditions for the modernization and specialization of agricultural production, strengthen Colombian agricultural institutions, and expand the supply of exportable products for which the country has great potential: beef, fruit, palm oil, cocoa, rubber, forestry products, and biofuels.

What trends in investment can you identify, and which sectors are the most attractive?

According to the IMF, the Colombian economy will grow by 4.4% in 2013. Total foreign investment increased from $2.47 billion in 2000 to $13.39 billion in 2011, mainly in the mining and energy sectors, and in free zones and hotels. Although the flow of foreign investment in agriculture accounts for only 1% of total FDI, the Colombian agricultural sector offers great investment opportunities. Colombia is one of the countries with the greatest potential for the expansion of agricultural lands in the world. Of the total area suitable for agriculture (21.5 million hectares), only 4.7 million hectares in agriculture and 459,000 hectares in commercial forestry are currently in use. Therefore, we hold huge potential to develop production facilities in crops like cacao, highly recognized for its flavor. Colombia expanded its cacao acreage by 56% between 2002 and 2011, reaching 145,000 hectares, and we target the establishment of 28,000 new hectares and the renewal of 36,000 more as part of the Decennial Cacao Plan. In regard to cattle, the country ranks fourth in Latin America (29.2 million head in 2012). The formalization of the industrial link (slaughterhouses), as well as the improvement of distribution and marketing practices, present opportunities for private investment. In terms of biofuels, the country has been increasing its production capacity in biodiesel and ethanol. Nearly 439,000 tons of domestic crude palm oil production are used for biodiesel, and more than 374,000 tons of raw sugar are used in the production of ethanol. To increase our competitiveness we urgently need to attract further investment to improve local and national road networks, transport capacity in ports and consumer centers, as well as irrigation and drainage infrastructure.

What steps are being taken to increase the volume and quality of small producers?

The government, through the draft Rural Development Act, is proposing a new regulatory framework that aims to promote programs of rural development, more effective management of territory, and sort and formalize land ownership issues. It also aims to define protected areas and resolve conflicts in land use. The proposed regulation aims to strengthen rural human capital, with a focus on early childhood nutrition, offer a universal coverage of education and basic health, as well as provide universal social security in rural areas. It will increase capital, spread knowledge and productive technology, strengthen partnerships and rural organizations, and improve the basic infrastructure of transportation, water, education, health, and sanitation in rural regions.

Also, according to the National Administrative Department of Statistics (DANE), 32,000 new or rehabilitated housing units were delivered to low-income farmers in 2012. For 2013, we have an ambitious budget plan to increase the figure to up to 100,000 housing units. Finally, more than 20,000 small producers have benefited from the Productive Partnerships Program that the government launched five years ago.