Colombia: Poised for Leadership in Ag Exports

It's no secret that Colombia's agriculture exports are skyrocketing. If it stays on this trajectory, Colombia could lead the world in certain sectors. But this begs the question: what factors will make or break Colombia’s rising-star status when it comes to agricultural exports?

The Rising Star of Colombia Agricultural Exports

After declining for several years (2012-2015), Colombia agricultural exports have been on the rise and making substantial gains each year, approaching nearly USD $3 billion in value.

Colombia: FOB Ag Exports by Value (Source: CEIC Data)

It should come as no surprise that the biggest of all Colombia ag exports is coffee, which makes up 45% of exports in the designated OEC category of “vegetable products.” Cut flowers make up 28% of exports in that category, and bananas have a 20% share. From there the next largest share of Colombia ag exports are various fruits at about 3.84%.

Colombia's Ag Exports (Source: Observatory of Economic Complexity)

Coffee production takes up a solid 20% of Colombia’s arable land, which is part of Colombia is the world’s second-largest coffee producer—and the mildwashed Arabica for which it’s known is a huge hit internationally. Coffee demand in general is projected to grow by 8.5% in the coming years, and Colombia is in the perfect position to meet rising global demand.But the country's potential extends far beyond coffee.

The Land and Climate Factors in Colombia Ag Exports

There’s certainly no shortage of arable land. In fact, back in 2016 the government’s Unit of Rural Agro-economic Planning (UPRA) noted Colombia was only using about 35% of its agricultural land!There has been a lot of agricultural land in rural areas unavailable for farming because of the unrest of Colombia’s long-running civil war. But the peace agreement between the government and FARC has resolved that barrier. This could allow coffee growers to expand into areas previously considered off-limits because of the threat of violence, as well as the conversion of coca plantations to more valuable, licit crops.

Ecoregions of Colombia

This diversity in ecological zones, topography, and climate means Colombia can produce crops for agricultural exports year-round. And a lack of precipitation is not something Colombian farmers have to worry about. The country receives the most rainfall of any Latin American country, ranking tenth in the world for precipitation. If anything, there can sometimes be too much rain, which can have a negative impact on crops such as bananas.Colombia has enormous potential - but there are still obstacles in the country's way.

Organizing, Scaling, and Formalizing Small Producers

Another way to further boost Colombia agricultural exports is assisting small producers to become better organized, scale their operations, and formalize their ability to enter export markets. As of 2019, Colombia has been the third-largest exporter of bananas behind only Ecuador and the Philippines as measured in value (USD$1.6 billion for Colombia’s 2019 banana exports).More than 82% of Colombia’s banana exports go to countries in Europe, and another 13% to the US. Back in December 2018, 28 small producers in Valley de Cauca obtained licenses to export their bananas and soon exported nearly four tons (3,500 kg) of bananas! Now imagine getting many more of Colombia’s nearly 6,000 small producers doing the same.Colombia's success with bananas illustrates the scope of what the country can accomplish when its industry is properly scaled and formalized. Bu while bananas may be the most popular fruit among Colombia’s ag exports, there are rich opportunities to scale other fruit exports into lucrative European and US markets. It seems everyone is looking to boost their immune systems these days, and Colombia has a range of unusual exotic fruits to do just that.

Colombia's Exotic Fruits

They include (top row of the image above) Guanábana or soursop, Pitaya or dragon fruit, Lulo or naranjilla, and Níspero (also medlar or loquat), as well as (bottom row of the image above) Curuba or banana passion fruit, Borojó, Mangostino or mangosteen, and Gulupa.There are also the more traditional fruits such as pineapples, mangoes, and especially citrus. If ever a time was ripe for Colombia to step up its support to small producers of fruits like these, it’s right now.

The Sustainability Factor in Colombia Ag Exports

Everyone is paying more attention to sustainable agriculture and the impacts of climate change on agricultural operations and farmers. Colombian farmers are quite willing to not only engage in sustainable agricultural practices, but also to produce organic crops, which fetch premium prices in lucrative export markets.One interesting approach for sustainable coffee growers is to diversify plantings to include passionfruit, avocados, and sugar cane alongside the Arabica coffee plants. Having these additional crops can help protect smaller growers from always being at the mercy of widely fluctuating coffee prices.Generally speaking, Colombia's organic product exports to the European Union rose from 63,114 tons in 2018 to 87,341 tons in 2019. But Colombian farmers, especially small growers in more rural areas, need support in navigating the perils of climate change on their agricultural practices, such as that seen in climate smart villages.

Infrastructure is a Huge Barrier

Perhaps the biggest barrier that needs to be addressed if Colombia agricultural exports are to achieve global leadership is the need for critical investment into infrastructure that will help small producers in rural areas plug into global markets. This means making focused investments in roads, bridges, telecommunications, ports, railroads, and strategically placed regional packing facilities incorporating the latest technologies and best practices.Colombia is beginning to step up with projects such as the Fifth Generation of Infrastructure Program investing $5.9 billion into a dozen different initiatives to build a variety of roads, railways, airports, and river navigability projects.The stars seem to have aligned for Colombia to become a strong global player in agricultural exports, at least as long as people are willing to invest in what needs to be improved in order for Colombia’s farmers to get organized and scale up their operations.