Colombia Agro Produce, special credit line launched for the sector

15 April 2020
The National Government will leverage credits for more than USD380 million in the rural sector.

Through the External Regulatory Circular P-09 of Colombia Agro Produce Special Line of Credit for prioritized sectors – LEC, some of the products that can bennefit from this credit are: hass avocado, blueberries, rice, poultry, banana, commercial forest plantations, cocoa, medicinal cannabis, tahiti lemon, flower, mango, palm oil, pineapple, aquaculture, bovine among others. In this way, small, medium and large producers; associative or integration schemes, belonging to this economic group could be beneficiaries to this credit line. The interest rate range of this economic aid oscillates from DTF* -1% effective annual rate (ear) - IBR** - 1.1% (small producers) to DTF + 2.5% ear- IBR + 2.5% ear (big producers). The credit term will be agreed according to production cycle, while the interest rate subsidy will be for up to 5 years and grace period will consider the production cycle (but up to 5 years). The activities covered by the loan include sowing, maintenance and production of crops, acquisition of animals and embryos, activities to promote the competitiveness of the dairy sector. In order to apply, one of the following conditions must be met: being in the clusters defined by UPRA, having a good practices certificate, having agricultural insurance, being a rural youth, being a woman, participating in “agricultura por contrato”, or having electronic invoicing implemented.

The External Regulatory Circular P-11 of Colombia Agro Produce Special Line of Credit – LEC stipulates that small, medium, and large producers, of poultry farming eggs, broccoli, medicinal and industrial cannabis, operating costs, bovine commercialization, flowers, corn, pepper, flowers, among others sectors, could be the beneficiaries of this credit line. The interest rate range of this economic aid goes from DTF-1% ear- IBR -1.1% (small producer) to DTF-IBR (big producer). The maximum subsidy per beneficiary is of USD63 thousands with a credit term that contemplates a maximum of 3 years of subsidy with a grace period that will consider rather the production cycle or be extended maximum for 1 year. Finally, the activities covered by the loan are sowing, crop and production support, rural activities, production support services, transformation of production and commercialization of production (not for large ones).

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*DTF: Deposito a Termino Fijo - Fixed term deposits (It is an interest rate based on the weekly weighted average of the interest paid by banks on fixed-term deposits).
**IBR: Indicador Bancario de Referencia - Reference Bank Indicator (Reference short-term interest rate quoted in COP that reflects the price in which banks are willing to offer or capture resources in the money market).

Corn, sorghum and soybean import tariff suspension

The MADR (Ministry of Agriculture and Rural Development) suspended the tariffs on imports of corn, sorghum and soybean until June 30 (with the possibility of extending the measure for an additional three months). This will help to increase the availability of these products since Colombia's production is insufficient and reduce the cost for some products. This is especially important for balanced animal feed, which can represent 60% of the production costs of chicken, eggs, pigs; as well as some other products such as fish, milk, meat and a wide range of food for human consumption.

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Food and beverage products that will be monitored and controlled

26 essential products will be monitored and controlled by DANE (National Administrative Department of Statistics) and the Superintendency of Industry and Commerce, in order to avoid price speculation and prevent hoarding behaviors that may occur during the period of economic emergency. The food and beverages products are rice for home consumption, long-life milk, refined sugar, campesino cheese, sunflower oil, green peas, onion, black potato, creole potato, egg and orange.

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Raw material prices are monitored and protected

Through resolution 071 of 2020 of the Ministry of Agriculture and Rural Development, the government takes extraordinary measures to prevent excessive increases in the prices of the inputs used for agricultural production, compared to the prices offered before the Health Emergency, generated by the Coronavirus COVID-19 pandemic.

Submit under the probation regime the baskets of relevant products or essential products of fertilizers, pesticides, veterinary drugs, biological products for livestock use and animal feed, used as inputs for agricultural production in the national territory, to make monitoring prices in the market and avoiding speculation during the health emergency caused by the pandemic.

This resolution applies to all natural and legal persons who produce directly or by contract. Also, those who formulate, import, distribute, market, sell or carry out commercial activities in the national territory of the inputs mentioned above in person or by an interposed person.

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