Agriculture in Colombia - Agricultural Policy

Agricultural Policy

The most relevant policy instrument affecting the recent evolution of the agricultural sector has been the price bands that Andean countries introduced to protect agriculture in the context of the trade-liberalization program of the early 1990s. According to the mechanism, when international prices decrease, import tariffs increase and vice versa. These price-band ranges remain, despite domestic controversy regarding the level of protection that they provide . This is mainly because of pressure from interest groups and because of the difficulties in identifying clearly the impact on international prices of the subsidies and internal supports given to producers in the developed world.

Public policy toward the agricultural sector also has included the establishment of subsidized sources of credit. Since 1990 such mechanisms have included the Fund for the Finance of the Agricultural Sector (Finagro). Other policy instruments have included minimum price guarantees, import quotas, subsidized credits and tax exemptions, campaigns to promote consumption, incentives for new investments and for forestry plantations, and more recent exchange-rate or currency-hedging options.