The European Union (E.U.) and Colombian government on Tuesday implemented a financial support plan for Colombia’s dairy sector.
Associated with the free trade agreement signed between the E.U. and Colombia in June of 2012, the E.U. will provide 30 million Euros ($38.6 million) to modernize and improve the competitiveness of Colombia’s dairy sector. According to the Minister of Agriculture, Juan Camilo Restrepo, 8.6 million Euros ($11 million) have already been delivered to the sector.
The E.U. ambassador to Colombia, Maria Antonia Van Gool, stated the 30 million Euro injection will go towards supporting the national government’s economic development of the sector, adding that the deal is intended “to strengthen the Colombian field, in particular the dairy sector, to face up to the future challenges facing the free trade agreement, to make the dairy line more competitive and inclusive, to prioritize production, contribute to its sustainable development and to achieve equal success in the local and international markets.”
The first phase of the program will focus on developing small Colombian dairy producers, which make up 66% of the sector and 23% of the county’s total production, to help them compete over time in the growing market. The program will also look to make improvements in the industries’ innovation, quality control and collaboration.
Responding to concern over the Colombian dairy market’s fate after signing the free trade agreement, the Ministry of Agriculture stressed that the agreement will not entail a complete liberalization of the market but instead the installment of a series of quotas for a limited number of products within a liberalization period of up to 17 years.
“For example, the quota of powdered milk that will benefit the E.U. (4,000 tons) represents less than 0.5% of the actual production of liquid milk in Colombia,” said the ministry. They also pointed out that products like liquid milk, cream, butter and queso fresco (typical Colombian cheese), will be excluded from the trade agreement, and therefore excluding them from competition in the Colombian market. However, European cheeses will be introduced to the Colombian market as part of the agreement.
The dairy sector represents 0.9% of Colombia’s GDP and 9.7% of farming GDP according to the Ministry of Agriculture.
Sources
- MINAGRICULTURA Y LA UNIÓN EUROPEA LANZAN ESTRATEGIA DE APOYO AL SECTOR LÁCTEO COLOMBIANO (Ministerio de Agricultura y Desarollo Rural)
- Gobierno lanza programa de apoyo económico al sector lácteo por TLC con Unión Europea (Caracol Radio)
- Ministry of Commerce, Industry and Tourism of the: Administration and EU Formalize Suppor for Colombia’s dairy Sector (4-traders.com)
