Nicaragua imports more agrochemicals, which is a positive sign

Despite the impact of the coronavirus pandemic on the Nicaraguan economy, the importation of agri-inputs increased from last year, according to figures from the Central Bank of Nicaragua, which shows a rise in both volume and value of products used in the field, coinciding with the agricultural growth maintained to September this year.

Between January and September 2020, Nicaraguan producers paid US$243 million for agricultural inputs, compared to $199.9 million during the same period last year, a growth of 22%.

In terms of volume, an additional 78 tons of products were imported compared to the same period last year. Producers frequently import fertilizers, urea, insecticides, seeds, veterinary drugs, potassium and calcium sulfates.

One of the most common inputs used for production are insecticides. In September 2020, insecticides worth $26.7 million was purchased while in 2019, this figure was £20.6 million, an increase of 29%.

In the case of urea, a low-cost fertilizer, international markets purchased products worth $27 million, three million more than last year. This fertilizer is important due to the high concentration of nutrients.

Similarly, in the same period mentioned above, $71 million in agrochemicals were purchased, higher than the total of $46 million purchased last year. This input is vital because it prevents and controls pests of animal or plant origin during production.

It should be noted that last year, sales of fertilizers and agrochemicals fell sharply due to the wider fiscal reform approved in February 2020, after the government tightened its policy of exempting such inputs.

Álvaro Vargas, President of the Union of Agricultural Producers of Nicaragua, pointed out that this year, producers were encouraged to plant and, therefore, bought more agri-inputs, using the good winter forecasts as a reference.

"One of the few sectors that is still growing is the agricultural sector, and as a result of the good winter forecast, which turned out to be true, planting areas increased and, subsequently, along with the purchase of inputs," Vargas said.

However, he stressed that this does not imply that the sector is doing well, since producers sow mainly to survive and have not invested in their farm or purchased agricultural machinery.

"There are no new investments in farms and machinery are only being repaired, because there is no money. There is only money to pay and eat, that is the reality," Vargas added.

This year, first sowing produced good results. However, later on, plantations were affected by hurricanes Eta and Iota, which, in some areas, caused losses of up to 70 percent in bean production.

According to the Central Bank, in the third quarter of this year, agriculture grew by 3.5 percent after experiencing an expansion between July and September of 5.4 percent, due to the greater generation of added value in banana, peanut, coffee and rice crops, among others.

Contraction of agricultural portfolio

Data from the Superintendency of Banks and Other Financial Institutions (Siboif) indicate that the agricultural portfolio, in September, increased 6.2 percent, compared to the same period in 2019. In absolute terms, this portfolio grew by 738 million córdobas. However, the number of loans dropped 15,075 to 11,382.

The livestock portfolio suffered a fall of 17.5 percent, from 2.66 million to 2.19 million córdobas.

Last year, the reform of the Tax Concertation Law created more obstacles for producers in terms of exonerating their purchases of agricultural inputs. In addition, agricultural machinery was removed from the list of tax-exempt products.