Colombian agribusiness in the wake of war

Colombian agribusiness in the wake of war

With peace treaty in hand, can weary Colombia rebuild its economy?

A few weeks ago I was lucky enough to be invited to Colombia to talk with business journalists about U.S. agriculture. The two-day conference, held in Ibague, Tolima, featured press conferences and a journey high in the mountains to a coffee plantation (more on that in my next blog). But the folks who garnered the most attention were political officials there to speak about farmland reform, and what Colombia will look like ‘post conflict.’

Pickers inspect 'cherries,' which will soon be hulled and transformed into roasted coffee beans. Colombia is the world's third highest coffee producer. Photo: Comité Departamental de Cafeteros de Tolima

“What conflict?’” most Americans might ask. Yes, Colombia got a black eye in the ‘90s as the world’s biggest cocaine producer, and the ‘War on Drugs’ still lingers. But the conflict on everyone’s minds is the 52-year civil war that reportedly will end with a cease fire agreement signed earlier this summer and a forthcoming peace treaty, after four years of negotiations.

The Marxist guerilla group FARC (Fuerzas Armadas Revolucionarias de Colombia) is the oldest and largest group among Colombia's left-wing rebels. They claim to be fighting against unequal land ownership; according to a Businessweek article, “less than 1% of the Colombian population owns 60% of the land, one of the world’s most inequitable ratios.” An incredible 1 in 10 Colombians have been pushed off their land or out of their homes, second only to Syria in the number of internally displaced people. Some 40% of farmland was fallow last year, mainly due to confusion over ownership.

When the government (President Juan Manuel Santos’ in his first four-year period) announced a peace talk process, established the office of land restitution and pledged to help owners gain back their land, the guerillas agreed to sit and negotiate.

All of this is happening amid deep public distrust, especially with Santos, who will end his second term in 2018 and constitutionally, cannot be re-elected. Santos believes peace will trigger an economic boom to the Colombian economy, but it will also be expensive – if the peace process is allowed to go forward at all.

Institutions are weak

I can’t possibly give you an accurate outsider’s assessment of Colombia after only spending a few days in this rugged, beautiful country. It’s a country with strong people and weak government institutions; many laws seem to be mere suggestions. Maybe that’s just how it is when you’ve been so deep and so long in a bitter civil war. Even so, it could be worse: life here may seem like paradise for most Colombians when compared to their neighbor Venezuela, a once rich country now near full collapse.

There’s a lot of unanswered questions about what will happen next in Colombia. And there are political factions fighting against the peace accord. But, if all goes well, maybe this country can take a deep breath and finally begin to look forward.

Humbled by how good U.S. citizens have it

I was invited to talk about U.S. agriculture; simply, to give these journalists a taste of how things work in our country. I wanted to showcase our extraordinary marketing infrastructure, the risk management tools we enjoy, and the security of things we take for granted - private property rights, the rule of law. Contracts. Lending.

It’s all so straightforward in the U.S. Not so much in Colombia.

How lucky we really are, I thought more than once.

Creating that Power Point made me a bit nervous – I didn’t want to sound like the bragging ugly American. But Rafael Mejia Lopez, president of SAC, Colombia’s Farmers’ Association and my host, put me at ease. Lopez earned college degrees in the United States, and has long encouraged Colombian farmers and agribusiness to adapt a free market approach to agricultural production. He urged me to take a ‘tough love,’ approach during my talk.

Maybe it’s because he’s seen our agricultural systems and believes there’s potential for something great in his own country.

In a globalizing economy, Colombia matters

You might be surprised to learn this is Latin America’s oldest and most stable democracy, with a free market economy and close ties to many countries, including the U.S. Coffee, bananas and flowers accounted for 65% of ag exports and as of 2014, export value was growing.

It may not be on anyone’s radar, but Colombia is an important U.S. trade partner – beyond just coffee, which generates $2.2 billion annually. The U.S. signed a trade deal with Colombia four years ago, which made 70% of our ag goods duty-free. In 2015, U.S. food and agricultural exports to Colombia totaled more than $2.4 billion — up 120% from 2012. The International Monetary Fund projects 4.1% GPD growth for Colombia through 2020. 

Colombians suspicious of large farms

So, while the future may hold promise, Colombians remain dubious. Carlos Del Valle, a SAC ag economist and my translator, helped me understand the mindset of the typical Colombian in this post conflict era. Consumers are suspicious of large farms and embrace traditional ‘peasant’ agriculture – sound familiar? I was told farmers don’t have a lot of pride in what they do, and they certainly don’t run farms like businesses. The average rural family makes $300 per month.

“People here are not trusting,” Carlos told me. “They need a boost of self-confidence.”

And some better roads, I might add. On a car ride from Bogota to Ibague we traveled 124 miles – in 6 hours. Half that time was spent fighting Bogota traffic, the other half up and down winding mountain roads. Traffic is so bad, the government bans certain vehicles from roads during peak traffic hours, based on odd or even numbers on your license plate. Carlos used a mapping guidance app on his smart phone, but even he got lost, and it’s no wonder; the roads are perilous, bumpy, and have few signs for orientation.

That kind of confusion seems to spill into everyday life here, but Colombians take all this in stride. They are good hearted, sweet, even fearless. And frankly they have more fun at press conferences than we do. At dinner one night we had traditional native costumed dancers, then a trio of guitar-slinging men serenading the crowd with beloved folk songs. People were singing and clapping – and this was all before they brought out the local anise-flavored “firewater.”

Nothing seems to ruffle their feathers, and maybe that’s how it should be.

After my presentation I was asked what I thought about the post-conflict process and what might lie ahead for this proud nation. I didn’t have a good answer. How could an American possibly comprehend what Hell they have been through here? What I know from the United States post-civil war is not encouraging: injustice for African Americans, carpetbaggers from the north, rampant corruption – and it took decades before any real progress was seen in the south.

“Patience,” is all I could say. “I think you will need a lot of patience.”

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