Agriculture in Colombia - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Agriculture in Colombia - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The agriculture market in Colombia is expected to register a CAGR of 7.0% during the forecast period (2021-2026).

In Colombia, small-scale agricultural producers are confronted with substantial inequalities. As was to be expected, the advent of COVID-19 has merely made matters worse. However, there is government support in the region during the pandemic. When the epidemic arrived in Colombia, the government was particularly quick to support the agricultural sector in the face of the health crisis. In particular, it took steps to make it easier for farmers to move around by giving them passes. In late March, it launched a 1.5 billion-peso credit scheme, Colombia Agro Produce, to support agricultural operations, particularly seed and input purchases. The scheme offers a preferential interest rate to smallholders of 3.5% compared to 4.5% for medium- and large-scale producers. It subsequently abolished customs duty on maize, sorghum, and soybean, in the hope of compensating for the significant devaluation of the peso over the past year, which was accentuated in March. That devaluation has naturally driven up the price of imported agricultural inputs.

Colombia, the world’s second-largest coffee grower, contributes 13.0-16.0% of the total world production each year. Bananas are second to coffee in economic importance. Other important export crops include sugarcane and cotton. Among food crops, rice, cassava, and maize are the most important crops. The area allocated to fruits and palm oil expanded by 221.0%, and its share in total crop area increased from 1.9% to 7.4% over the last 20 years.

Key Market TrendsHigh Growth Potential for Agricultural Exports

Coffee and banana crops play an important role in the agricultural economy of Colombia. According to the United States Department of Agriculture (USDA), Colombia had exports valued at USD 2.90 billion in the year 2018, which is 74.0% higher than USD 1.70 billion in the year 2008. The country showed a consistent quantity of exports since 2015. In 2019, Colombia's exports represent 6.8% of world exports for bananas and it ranks fourth in the world's exports. This scope in exports leads production of better crops, which drives the Colombian agriculture market further.

Increasing Demand for Staple Food

Cereals are the major supplements consumed with the staple food. The increase in population is leading to higher demand for staple food, and the cereals and pulses are being consumed at a higher rate over the years. The production is significantly increasing every year. The volume of the production of cereals and pulses was 4.6 million metric ton in 2019, which was twice the production in 2014. Thus, with the production of staple consuming food cereal the market is expected to grow further in the forecast period.

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