GROWTH PAINS

Colombia 2017 | AGRICULTURE | INTERVIEW

TBY talks to Jorge Bedoya, President of the Colombian Agriculture Society (SAC), on taking full advantage of the opportunities in agriculture, encouraging greater investment in the sector, and growth prospects.

Jorge Bedoya
BIOGRAPHY
Jorge Bedoya holds a master’s in economics from Javeriana University and a master’s in public policy from the John F. Kennedy School of Government at Harvard University. He began his professional career at the National Federation of Coffee Growers and was president of the National Federation of Colombian Poultry and Egg Producers, Fenavi for eight years. Bedoya is also a former Vice Minister of Defense.

What challenges do you expect from the implementation of the peace deal, particularly in the agriculture sector?

In the short term, the greatest challenge will be the specific implementation of the agreements in two areas. The first is the eradication of illicit crops and the proposed substitution of illicit crops. This is a large challenge for the agricultural sector because of the 188,000ha in which there are illicit crops, the government has only committed to replacing 50,000ha. If producers now in the illicit business of drugs do not have a real market-driven option to replace illicit crops, this will be a major failure down the road. That is why it is important that the government works with the private sector to make a real contribution that not only serves as a substitution but also becomes a market-driven strategy. It must be viable; otherwise, a great deal of subsidies and economic support will be needed from the government, which can only ever be a short-term solution. Second, we are now discussing the land and property rights laws, which is also a huge challenge because these will send a signal to the investors who, regardless of their size, are committed to increasing the profitability of the agricultural and agro-industrial sector in Colombia. There are many opportunities; however, when the rules for businesses are unclear, a great deal of investment gets held up. The country is waiting for this process to be fully implemented, to know that private property is respected, that there is equal access to land, and that there is no political ideology behind this.

What strategies should be used to incentivize investment in the agriculture sector?

There are multiple ways to create a new mindset in the community of agricultural producers. We need to transform a supply-oriented sector into a market-driven one. What we have now are incentives from the ministry of agriculture for increasing the supply but not necessarily to be able to sell the products. Elements such as branding, packaging, product differentiation are critical. Most producers in Colombia do not necessarily invest resources in these things; however, when competing with products from other countries, new criteria are needed to make decisions on investing resources to be more attractive to consumers. We have been narrowing the divide between producers and consumers to prevent the margin staying in the hands of middlemen. It is not that we want to get rid of them; we need the agricultural sector to be more profitable and self-sustainable. Regarding labor force, we are facing a new challenge, which is the reduction of the manpower in some rural areas. We need to formalize a labor policy for employment in the rural areas and think about the children growing up in these areas. Introducing new technologies, improving education for the rural population, formalizing rural labor contracts, and creating incentives for rural entrepreneurs are vehicles to make the countryside more attractive for people and for investment.

What are your expectations for how the agricultural sector will finish 2017?

Last year was modest, with growth of around 0.5%. It was affected by two things: El Niño and the transportation strike, both of which were concerning. While the latter is unlikely to happen again this year, there is a 50% probability according to some models that El Niño will strike in the third quarter of 2017. It is hard to make general predictions about the behavior of the agriculture sector because we need to consider coffee, palm sugar, poultry, and eggs, among others; it would be tough to make such a prediction. However, if the policy and rules of engagement are stable, if the signals for the people who invest in their own businesses are the right ones, and if the economy and consumption increase, then this could be a good year for the agricultural sector.