CULTIVATION & CONSERVATION

Ecuador 2012 | AGRICULTURE | REVIEW: AGRICULTURE

With excellent climate advantages and a huge workforce in the sector, Ecuador has carved its niche as a producer of high-quality agricultural goods and has become a leading world producer in multiple segments.

Ecuador's economy has been tied to commodity exports since the late 19th century, when world demand for cocoa began to influence the country's agricultural traditions. As foreign interest turned to Ecuador, indigenous populations migrated from the mountainous regions to the coastline, the new frontier of year-round agricultural production.

In the 1950s, focus shifted to the industry that has become Ecuador's claim to fame, bananas. The country is now the source of more than 35% of the world's bananas, exporting almost 300 million boxes per year and contributing $2 billion to the country's GDP. Other natural resources, such as fish, flowers, coffee, sugar, tropical fruits, palm products, rice, and corn have become pillars of agricultural production, and income generators for much of the country's working population.

Although Ecuador has been granted preferential access to the US market through the Andean Trade Preference and Drug Eradication Agreement (ATPDEA), the document will expire in July 2013 if no further agreements are reached. Ecuador also has preferential access to the European market through the EU's Generalized System of Preferences (GSP). However, changes to the EU scheme mean that from January 2014, Ecuador will no longer be eligible for the GSP. Ecuador is now looking to sign a new trade agreement with the EU before its GSP access expires at the end of 2013 to preserve its valuable window on the European market.

With a 2012 budget of $282 million, the Ministry of Agriculture, Livestock, Aquaculture, and Fisheries (MAGAP) is working to protect the agricultural sector by centering its attention on small- and medium-sized farmers, boosting the country's fish supply, and conserving the environment. It aims to accelerate production, revitalize unused or fallowed land, and reach important trade agreements with the US and EU. These goals will set the pace for agricultural development and output in Ecuador for coming years.

TOP OF THE CROPS

Surveys carried out by the Agriculture Statistics Agency (ESPAC) and MAGAP show that from 2002 to 2010, permanent crops have experienced a positive average growth rate of about 1.5%. Leading this growth have been Ecuador's agricultural mainstays; bananas, corn, heart of palm, broccoli, cocoa, and coffee, which contribute heavily to both domestic and international consumption.

Bananas, by far Ecuador's most important export crop, are party of an industry that employed over 2 million workers in 2011. Over the past decade, the production of bananas has steadily increased. In 2000, production levels were at 21.8 tons per hectare; by 2011 production had reached 37.65 tons per hectare. Bananas that are not sold to the international market at the fixed price of $5.50 per box are promptly purchased by local distributors or MAGAP itself, which then allocate the crop according to domestic demand. With 12,000 producers—far more than Colombia or Costa Rica—bananas are Ecuador's second largest sector after oil and gas. However, one of the crops showing the strongest growth in production is none other than the unique heart of palm, a vegetable that has increased in popularity on the world market in recent years. From 2002 to 2011, production increased 113% to 197,750 tons. PRONACA, one company spearheading the development of the heart of palm industry, has enjoyed the benefits of diversifying into the processing of the vegetable. However, the success of heart of palm is enjoyed across Ecuador; local growers have also reaped the rewards of this unique product. “Growing heart of palm is a source of income for many farmers in Ecuador that provides high-quality products from over 5,000 hectares," Juan Ribadeneira, CEO of PRONACA, told TBY. “These products have been well-received in the canned food market worldwide."

Other important crops include vegetables, with corn and broccoli being two of Ecuador's specialties. The provinces of Bolívar, Azuay, Pichincha, and Cotopaxi are the country's largest producers of soft dry corn, comprising close to 68% of domestic output. Meanwhile, 21.44 tons of broccoli were produced per hectare in 2011, up from 14.6 tons per hectare in the year 2000. Potatoes, soybeans, wheat, artichokes, and rice, are just a few of Ecuador's other revenue-generating crops.

COFFEE & SWEETS

According to MAGAP, Ecuador's cocoa output in the year 2000 was 107,911 tons per hectare. By 2011, this figure had reached 212,249 tons per hectare. This growth can be attributed to a high-yielding clone of the traditional cocoa bean, which currently constitutes about 50% of Ecuador's cocoa exports. The growing amount of output has escalated production in the country, with some companies, such as Chorrera, seeking to expand facilities. With the capacity to handle up to 18,000 tons per year, the company's plant must grow to compete with the multinational companies entering the market. To survive in an increasingly tough business environment, “you have to either work with them or you have to differentiate your product," Vincent Zeller, Managing Director of Chorrera, told TBY. “What we're doing is vertical integration. We're developing the production of cocoa while also working with a lot of new farms whereby we create a new market where they can hedge their cocoa in the future."

Pacari, one of the first companies to certify its chocolate producers as “organic," works very closely with farmers to ensure quality. Santiago Peralta, General Manager of Pacari, told TBY that the company “began to enter into dialogue with people out in the fields. We have quality requirements, and we pay better, because our workers work harder to achieve this quality. We began to be very connected to the farmers and their needs." Companies such as Pacari are revolutionizing the way cocoa is processed by employing composting techniques and using organic methods of production.

Although work in the fields is gradually decreasing, leading sugar producer Azucarera Valdéz believes that greater mechanization and an increased focus on technology are playing a large role in the sugar sector's development. R&D in sugar production has led to new discoveries, including a more efficient crop. According to Ricardo Rivadeneira, Executive President of Azucarera Valdéz, the company “will consistently introduce new varieties. This means types of sugarcane that are more resistant to diseases and climate variations, that produce better yields in sugar, and that produce provide more tons of sugarcane per hectare." With these developments, the sugar industry is set to maintain its position as a staple of agricultural production in Ecuador.

In terms of coffee, 34,822 tons per hectare were produced in 2011 down from the decade's peak of 40,804 tons in 2005. Despite the decline in production, coffee output is on the rise again, as Ecuador produces 200,000 60-kilogram bags of coffee per year and exports 95% of the total processed amount.

LIVESTOCK & FISH

Cattle, pigs, and poultry comprise the three main farm animals used as livestock in Ecuador. In the southern part of the country alone, there are 270 poultry farms and 1.1 million chickens processed for meat, 22% of which are bred in the countryside, according to Ecuador's National Statistics Institute (INEC). In addition, there are 1,740 pig farms in the country, and five main provinces—Manabí, Asuay, Loja, Pichincha, and Guayas—are home to the country's 5 million head of cattle.

The fishing industry has made a large impact on Ecuador's economy by creating jobs and supporting the government budget. Tuna and shrimp are the most important seafoods leaving the country's shores, mainly destined for Europe, the US, and other parts of South America. Tuna sales abroad reached $970 million in 2011, 60% of which was purchased by European consumers. Although the prices of fish vary significantly when compared to those of chicken, beef, and pork, the tuna industry has remained profitable, with prices at $2,000 per ton in 2011. To protect this valuable resource, Bruno Leone, President of Chamber of Fisheries, recognizes his organization's duty. “Ecuador is a champion of tuna conservation, and each year we implement stricter conservation measures," Leone explained to TBY. “As a result, tuna is one of the only fish being harvested sustainably at the moment."

FLOWERS & ROSES

More than 500 varieties of roses are grown in Ecuador, far more than in any other country. It comes as no surprise, then, that during the period before Valentine's Day, the country's 275 rose farms are very active. In 2012 alone, 70% of Ecuador's 10,500 tons of flowers were sold for the celebration of the holiday. Between January 23 and February 9, 2012, 250 million flowers were sold and transported on over 200 flights around the world.

Although the flower industry is a recently developed segment of the agriculture sector, it currently comprises up to 25% of the country's total agriculture exports. Over 170 exporters sold $678 million worth of flowers in 2011. The US received 41% of the crop, Russia purchased 23%, and Europe imported 21%, according to Ignacio Peréz, CEO of the Association of Producers and Exporters of Flowers (Expoflores). In total, Ecuador exports flowers to over 108 countries, as part of a local industry that directly generates about 60,000 jobs and employs at least 120,000 people in total, directly and indirectly.

While coffee, chocolate, and flowers may be considered simple pleasures for some, these products are what have been fueling the country's agriculture sector for decades. As the country grows, its other top crops—such as bananas, corn, and tuna—will remain the steady drivers of the economy well into the future.