Colombia’s livestock industry calls for anti-smuggling measures

Posted on Feb 12 2014 - 3:14pm by Rico
(Photo: Dow Agro)

Colombia’s cattle farmers are condemning the smuggling of cattle and dairy goods from Venezuela and soliciting preventative action from the government, reported a national newspaper Wednesday.

Jose Felix Lafaurie, CEO of the Colombian Livestock Federation, told the Vanguardia newspaper that the illicit trade undermines Colombia’s ranchers, claiming that without an effective government response, the future of one of Colombia’s oldest industries could be in danger.

Specifically, Lafaurie is asking for “a wall to keep out contraband that circulates freely and with impunity in the country.”

According to the union leader, 3 tons of powdered milk per day and 110 tons of cheese per week enter the country illegally from its Venezuelan neighbor, along with live cattle originally sold from Colombian ranchers to Venezuelan buyers.

The latter process is known as the cattle “carousel,” and takes advantage of the black market exchange rate of US dollars by exploiting the difference between the arbitrary official rate set against the Venezuelan peso, and the natural market price of US currency in Colombia.

MORE: Cattle ranchers plead for gov’t intervention in illegal cattle ‘carousel’

To illustrate the extent of the problem, Laufaurie explained that, while Colombia sold 240,000 animals to Venezuela last year, reducing supply within Colombia, the internal price of beef nonetheless evidenced a “downward trend” due, she claimed, to the prolific re-entry and resale of Colombian cattle.

According to Laufaurie, “the government has to take action now,” to prevent the practice of cattle smuggling. Her suggestion that a wall be built along the border seems unlikely to come to fruition, however, given the dense vegetation and lack of development that characterizes both sides of the shared border.

Earlier this week, Colombia and Venezuela announced a suspension of remittance shipments between the two countries, as part of a joint effort to reduce profiteering off the currency imbalance.

MORE: Venezuela to halt sending of remittances to Colombia

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