COLOMBIA Rice Sector

1. COLOMBIA Rice Sector • 42 Millon people • 1´1 MKm2 • 480.000 ha rice. 2.5 Millon Tons • Yield 5.2 tons/ha • 1980 rice consumption 40 kg/ PerCapita 1997 rice consumption 21 kg/ PerCapita • 2003 rice consumption 41.5 kg/ PerCapita

2. Economic Impacts • The prices of rice have decresed by 38% in real terms over the last 12 years, and costs, which affect producers incomes, have followed a similar trend. • Analysis substitution hypotesis between rice and wheat shows that rice prices are conditioned to the price of imported wheat. • The Colombian rice supply is very elastic. Thus, production increase or decrease proportionally more than the increase or decrease in producer price.

3. Economic Impacts • In summary, given the relationships among international quotations and domestic rice prices, the decrease in the price of the rice stimulated per capita consumption of rice. • The decrease in price was more than compensated by the decrease in production costs. • Effects of international prices on Colombia’ trade balance: Colombia was a net rice exported until 1991. After that year the situation changed and since them the rice balance in negative.

4. Social Impacts • Rice cultivation contributes favorably to employment generation and to labour absorption in agro-industrial activities. • Employment generated by rice production incresed by 0.3% annualy between 1987-2001 • Rice cultivation also energizes local and regional development in other related activities. • Production is mainly affected by land price and use, especially in cases where land is adapted for water channelling and irrigation, causing change in the value per hectare depending on the production area and cultivation system.

5. The social implication of a concentration of land ownership among a restricted number of hands is a less equitable distribution of income and wealth • Social conflicts in the main irrigated rice- growing areas in Colombia some conflicts have been arising with regards to the use of water resources.

6. Environmental Impacts • The rice agro-industrial chain is one of the most demanding sector in terms of agro-chemicals for production (fertilizers and plaguicides) • Significant increment in the cost of pest and disease control (Monocultur) • The chemicals used to control insects include a range of active ingredients.

7. Water resources: The continous aplication of agro-chemicals can cause trace elements of these chemicals to contaminate aquifers and gruond water • Land resources: are affected by construction and land preparation, resulting in soil compactation and erosion • Air quality: Several activities related to rice production affect air quality. The aplication of herbicides and fertilizers liberates harmful gases and unplesent smells

8. Biotic elements: In general, the development of the practice of monocultivation has generated a succesion of alterations in the biological diversity of natural ecosystems. • The Environmental Ministery, Fedearroz and the society of colombian farmers developed an Environmental Guide for rice cultivation. • This document was a useful input for the FTA negotiations with the USA.