Page 108 - STRATEGY Magazine (G)

Guatemalan exports from agricultural products have reached US $1.8 billion in recent years due to the region’s location and low transportation costs, and with few legal restrictions placed on foreign investors, this number could continue to grow.
there are also negatives that affect Gua- temala’s revenues. For example, much of the forest is illegally logged, leading to curtailed profits.
In an attempt to ameliorate the problem, Guatemala encourages farm- ers to certify their plantations with the government. The government also offers subsidies to those who establish or man- age natural forestry plantations in an effort to increase the profits from legally harvested trees. This allows the country to guarantee to buyers that products originate from certified forests when exporting to global markets.
Guatemalan forests offer an almost endless variety of products. According to the National Forestry Institute, there are 979 different species of trees in the re- gion, with the most prevalent being pine and the much-desired teak. Furniture, decking, and even boats, all products with large international markets, are made from these woods.
LAND TO SEA
Livestock has long been a stable source
of income for Guatemalan farmers. Yet livestock has become an industry of contradictions, and the proverbial list of pros and cons has led to intense debate and little action. When the demand for meat and milk products began to increase rapidly in the 1970s, the Guatemalan government allocated land specifically for the expansion of livestock. Much of the land allocation took place in the northern
part of the country, a region that steadily grew in population due to the availability of jobs and the promotion of colonization.
The program, however, was not well planned. While this growth was good
for the people, it has not proven to be positive for the land. Livestock farming has not only contributed to deforestation, but also to the degradation of pastures, making the land in these areas fit for very little. Soil does not quickly recover from livestock’s abuse, yet fallow periods have been reduced in an effort to combat the demand for productivity.
Private organizations have begun working with livestock farmers to discov- er a solution, but such reversals take a substantial amount of time. The Centro Agronómico Tropical de Investigación y Enseñanza (CATIE) is one such organi- zation that is working with farmers, local leaders, and institutions to design plans for the future and not repeat the same mistakes that are consuming the natural agricultural resources of the region.
Aquaculture in Guatemala has also faced adversity, namely in the form of abating prices, diseases, and overfish-
ing. In the late 1990s, Hurricane Mitch claimed the main production farms, which created a substantial loss to the in- dustry. This loss not only damaged export possibilities but internal food security as well, prompting the Under-Ministry and Food Security department to promote the culture of tilapia in an effort to reduce hunger in the region. The framework
that was created from this natural disas- ter has led to a very successful growth in aquaculture, however, with tilapia now viewed as both a food staple and a market product.
OBSERVING THE ORGANIC
Globally, awareness of organic products is on the rise, leading to a 30 percent increase in the organic food indus-
try over the last few years. While the dietary benefits of organics are still up for debate, consumers are increasingly becoming fearful of the long-term effects of genetically modified organisms and the consumption of pesticides and fertilizers. Guatemala is well positioned to profit from this industrial increase due to its fertile soil and ideal Central American location, with access to ports on both the Pacific and the Caribbean.
This potential profit, however, is only likely to be in the form of exports. Gua- temalan residents are mostly unaware of organic products, and due to the unfortu- nate poverty levels that see much of the region’s inhabitants consuming merely for subsistence, further awareness would not lead to additional revenue. Aside from sugar, approximately 90 percent of Guatemala’s organics are sold in order to be redistributed. This includes coffee, the country’s most prominent export.
Though some of these redistributions happen through the large supermarket chains located in Guatemala, even those sales are mostly to foreign residents. The United States alone has seen a growth of US $359.1 million from 2013 to 2014 in its consumer-oriented organic market, and Guatemala is increasingly a source of those products.
The production of organics in Guatema- la is only going to increase as this market continues to grow. In 2014, 94,000 hect- ares of land in Guatemala were dedicated to organic crops, yet only 14,000 of those hectares were actually being cultivated. Similarly, there are 6,346 organic farmers in Guatemala; however, only a hand- ful—at present, a mere 146—of those are actually certified and eligible for exports, and of those, 75 are registered with the Guatemalan Ministry of Agriculture, Livestock, and Food.
MAIN MARKETS FOR GUATEMALAN EXPORTS OF ORGANIC PRODUCTS
80% OTHER COUNTRIES 12%
JAPAN 5%
UNITED STATES
106 STRATEGY
SPECIAL REPORT
EUROPEAN UNION
SOURCE: USDA FOREIGN AGRICULTURAL SERVICE
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