Transcript Nicaragua: agriculture in a Liberalization context

Nicaragua: agriculture in a
Liberalization context
Early stages of integration to global networks.
Context
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Nicaragua is the largest country in Central America,
with a 130, 000 km2 and 5.4 million people, half of them
live in rural areas.
Nicaragua rates in the position 112 according to the
Human Development Index, 48 % of the total population
live under the poverty line, and 70 % of them live in
rural areas
Agriculture represents 28 % of GDP.
Main agricultural exports are: coffee, beef, sugar, dairy
products and fruits. Agricultural production represents
42 % of total exports. Food production include grains
such as: maize, beans, rice, poultry and pork
There are 200,000 farms and 6.27 million has, (1963: 3,8
million has).
Land Tenure
Nicaraguan Land Distribution according to the National Census 2001
% 70.0
60.9
56.5
60.0
50.0
34.5
40.0
30.3
30.0
20.0
9.1
8.8
10.0
0.0
less than 14 ha
14.01 to 70 ha
Range
Area
Families
More than 70 ha
Land Tenure
Lorenz Curve of Land Concentration in Nicaragua 2001
120.00
100.00
% of Land
80.00
60.00
40.00
20.00
0.00
0.0
10.0
20.0
30.0
40.0
50.0
60.0
% of Families
70.0
80.0
90.0
100.0
110.0
Land uses
Land uses in Nicaragua 2001
Total area: 6,277,745 has
4%
11%
14%
5%
Annual Crops
Perennial Crops
Land in rest
19%
15%
Natural pastures
Grass
Woods
No agricultural land
32%
Liberalization and commercial balance
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After 1990, there has been a rapid liberalization process
Key agricultural products have been protected: maize, rice,
bean, dairy products and sugar
Agricultural exports have increased modestly (5 % annual)
Agricultural imports have increased slowly. There is a
positive balance in the agricultural trade. This may change
with DR-CAFTA and Central American Integration
process.
Nicaragua has a negative trade balance due to industrial
and oil imports.
External Balance:
Nicaragua: External balance on goods and services (% of GDP)
0
1990
1991
1992
1993
1994
1995
1996
1997
-10
% of GDP
-20
-30
-40
-50
-60
-70
years
1998
1999
2000
2001
2002
2003
Trends in the Nicaraguan Agriculture
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First, a small segment of farmers linked with global
distribution networks, such as quality markets for gourmet
coffee, dairy products, sugar, peanuts, and plantains.
Second, traditional agro-export chains integrate a significant
number of cattle ranchers and coffee growers
Third, the majority of rural households that produce food
products with low quality and are linked with local
distribution networks
Trends in the Nicaraguan Agriculture
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In general, rural workers and female-head household are
the most vulnerable population across regions.
The dry tropical region and the agricultural frontier have
very few links with dynamic agricultural markets.
Farmers from the Pacific plains and the old agricultural
frontier have strong links with the traditional agroexport chains but only a small segment of agricultural
producers have links with global distribution networks
Businesses integration processes are in the early stages of
development. Initial investment from Walmart, Cargil,
Starrbucks, Yoplait and Parmalat.
Vulnerable households Livelihood strategies
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Export Production Zones (Textile maquilas)
Migrations to Costa Rica are related to jobs in the
agricultural and services sector (300 to 500 thousands).
Migrants to USA mainly work in the construction
industry and the services sector (300 thousands
approximately).
There are limited migrations between rural regions
Migration approximately represents 25 to 30 % of the
active economic population
Public and private transfers:
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Public transfers through projects for poverty reduction and
public infrastructure are estimated at 250 million per year.
Public and private transfers represent about 44 percent of
agricultural GDP.
Public transfers tend to support relatively wealthy
segments.
Private remittances shore up incomes of rural poor
household
Structural Blockades
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Available land is now a scarce resource; thus internal
migration are limited.
There are growing restrictions for Nicaraguan migrants
in both Costa and the USA.
Public transfers are highly dependent on foreign aid,
which is declining.
Challenges:
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Intensification of the agricultural production, increase
land and labor productivity.
Increase competitiveness of sensible products in the next
15 years in order to compete in a free trade context (Chile,
Mexico, USA, Taiwan and EU).
Reduce fragmentation and concentration of rural
financial markets.
Resolve rural property issues and design public policies
in order to reduce land concentration.
Integrate small and medium farmers to productive
clusters and distribution networks
Challenges:
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Attraction of FDI with higher level of technology, which
will demand skilled labor force and pay higher salaries.
Compensation policies for most affected families,
investment in human capital in order to integrate them
to other markets (labor and services)
Public policies to facilitate/stimulate investment of
remittances in productive activities
A coherent public intervention in rural issues; currently,
Nicaragua has several institutions, strategies and rural
development interventions
Thanks, this is Nicaragua