Interview with Vice-Minister for Trade and Industry, Verónica Rojas

Tortilla Con Sal, July 28th 2011

TcS : Vice Minister, what has been ALBA's impact on Nicaragua's trade from your point of view?

Vice Ministra Verónica Rojas : Since the establishment of the Bolivarian Peoples' Alliance we've had two main impacts. The first impact in our external trade has to do with the democratization that has taken place in a real way for the economic actors in terms of their access to outside markets. For example, in Nicaragua's case we are the biggest agricultural producer in the region. We are the cattle country par excellence.

So of all our production about 77% comes from the agricultural sector. And they are small economic units, small farms, often no more than 7 to 15 hectares. And they are dedicated to both arable farming and cattle rearing.

One of the main products that has had what I'd call a large increase with the opening up of ALBA markets, especially Venezuela, has been the sale of live cattle. How has that helped us? It has helped us by creating an outlet that had previously been closed to exports of live cattle.

We're talking about the five years after the year 2000 when there was a market in Mexico. And these were bullocks of up to 300 kilos in weight. Once that Mexican market closed for live cattle exports, what happened to our small and medium sized cattle producers? They were left holding cattle without an export outlet.

So the farms were saturated with cattle. That had a serious effect, to the extent that indicators of extreme poverty affected small farms that should not have been in extreme poverty but were, despite having land to cultivate and livestock, and could well have been in a better situation. However, on having the external market closed, they were left unable to sell their product.

The opening towards Venezuela has affected us because it allows an outlet for already existing cattle there in the productive units. The cattle farmer was losing money because he had the animals grazing for longer. They couldn't sell into the external market, nor could their cattle be absorbed internally.

That's why I insist on the democratization of foreign trade. Because the fact that it is based on collection and consolidation of lots for export permits collection farm by farm, identifying those cattle that fill the requirements and that benefited a wide range of small farmers.

And what did that positive impact allow? It has allowed two things. An improvement in living standards and greater integration into the country's domestic market of that part of the population. Because they have to buy things and, too, it has assured their ability to renew their stock. These things are positive in the short term. I sell two or three bullocks or heifers that satisfy the ALBA market requirements and that automatically benefits myself, my family and my network. I am able to improve their living conditions.

But also I can expand with a programme of stock retention promoted individually by cattle farmers. They have renewed the process of keeping calves and fattening them to sell as bullocks and that permits a continuing improvement in stock and increases the efficiency of the cattle sector and of the country.

Another important element. Since there is now a market open, as a producer I have to consider how to be more efficient and, in a short time frame, cut the time it takes to ensure the appropriate weight and size of the cattle I am going to sell. I introduce technology to do that and to that end the Ministry of Agriculture and the Institute for Rural Development, our government bodies, have accompanied producers to ensure they reach the required quality.

So the effects run from ALBA to Nicaragua and from Nicaragua to the Central American region. Why to the Central American region? Because other governments have also signed agreements, even some that have free trade agreements not with ALBA but with other countries, but with results from the impact of the creation of ALBA.

With the creation of ALBA a market has opened up for all of Central America that creates an opportunity for the rest of the Central American countries, given Nicaragua's example to trade in particular with Venezuela. Other countries that produce less than us, but which do produce cattle as well, have made both complete and partial free trade agreements with the ALBA countries.

But that's not all. Because ALBA's existence gives us market security at a fair price and, above all, the fact that we don't face the prospect of political change in counterpart countries that might close down markets. In the case of the ALBA countries, we have the security of those markets staying open. That has given us the chance to think more effectively, not just about ALBA but about other markets too.

It has allowed us to advance in updating the phytosanitary aspects of our production and updating our technology so as to be able to enter new markets. We should not view ALBA only as ALBA in Nicaragua or ALBA in Central America, but as Nicaragua within ALBA broadening and improving productive conditions  for example with the countries of the Central American Free Trade Agreement, with Taiwan, with Japan, with other countries, with the European Union.

For example we have now started procedures to ensure bovine traceability. About two and a half years ago it was something the markets were asking for and we knew we were running out of time to implement it, but we hadn't the conditions to be able to do so. The fact that there's a guaranteed market stimulates in the mentality of producers the need to change, along with a government like ours offering that change via different programmes, like those of bovine traceability and phytosanitary programmes that have helped us declare the country free of swine flu or avian flu and with a controlled risk of mad cow disease for example.

This makes farmers more disposed to change, more disposed to take on their business responsibility to be more competitive and make their farm or their crops more competitive so as to make their sector of the economy and the country more competitive too.