LatinFinance - May/June 2016 - Honduras - HS15
Honduras
New products, new markets
Free-trade agreements and changing
eating habits are also helping Honduras
position itself in niche markets that did
not exist two decades ago. Honduras
is now the leading exporter in Central
America of so-called oriental vegetables
to the US and Europe, including varieties
of cucumbers, eggplants and okra.
Exports of these last year were above
$100 million and the government sees a
big future.
Other crops that have been increasing
in volume and revenue include cashew
nuts, melons, onions, squash and sweet
potatoes. Agrobusiness enterprises, such
as Monty Farms, are taking advantage
of windows in the US and European
growing seasons to supply fresh
produce to US supermarket shelves in
the January-March gap.
"We are looking at new crops and
new markets for crops that have shown
important potential," says Paz.
This includes Asian markets, although
Source: Reuters
altitudes to cacao. Coffee grown at
lower elevations goes into commercial
blends that fetch far fewer dollars than
more niche-oriented specialty coffees.
"The government is providing
low-interest loans for the conversion
to cacao of coffee farms below 2,600
feet," says Economic Development
Minister Arnaldo Castillo. "The quality of
Honduran cacao and our geography give
us an advantage over other countries
wanting to do the same thing."
Paz estimates that up to 120,000
acres could be switched to cacao.
He says the plan had the added
advantage of implying reforestation,
allowing Honduras to tap into funds for
mitigating climate change.
Despite no longer being Latin
America's leading exporter of bananas,
Honduras is not giving up on the
crop that once shaped the country's
sometimes conflictive past.
It remains in the global top 10 banana
exporters, but far behind big producers
like Ecuador, and also behind Guatemala
and Costa Rica.
Bananas rival palm oil as the country's
second largest export crop. Banana
exports last year were approximately
$500 million, around 10% higher than
the previous year, according to the
Central Bank. The US is the principal
market. The agriculture ministry expects
an additional 3,000 hectares to be
planted this year.
LOOKING TO DIVERSIFY: Coffee is a leading export,
but Honduras wants to develop cacao and other
products
there are some obstacles to overcome.
The minister says his office has been
negotiating for some time with Japan
to resolve phyto-sanitary issues over
Honduran melons. A favorable outcome
was expected in the second half of this
year. Exports could easily quadruple and
once the barrier was lifted with Japan it
would be easier to open up the South
Korean and Taiwan markets too, Paz
says.
Honduras continues to strive to
expand market access with countries
with which it has long-standing trade
agreements, including Mexico and the
US. Honduras is working with authorities
in Mexico to certify its processing plants
to export lamb to that country, hoping
to replace Australian and New Zealand
exports there. It is also in talks with the
USDA to be eligible to export chicken to
the US. Honduran processing plants are
already USDA-certified to export beef.
"It is a political and sanitary issue,"
says Paz. "On the political side, things
are in order and the private sector
in the US is not opposed. We expect
approval soon. The last USDA inspection
was positive and it recommended our
inclusion to export chicken."
Production is only part of the battle.
The government has been looking at
ways to increase financing for agroexports and to help farmers get products
to market.
The national Agrarian Investment Bank
is being reformed to attend to a wider
public and two other loan programs have
been beefed up. One, known as FIRSA,
provides loans to companies that are
funneled to producers, while another
provides low-interest loans to suppliers
for key inputs and services, such as
seeds, fertilizer, and insurance.
This second program, which was
created two years ago, reached 10,000
small farmers in 2015. The investment
bank will lend around $40 million this
year at interest rates of 10%, while FIRSA
expects to lend $68 million this year with
average interest rates of 7.25%.
Loans to the agriculture sector are
still low, accounting for less than 6%
of lending last year. The amount is
not expected to vary much this year.
The Honduran Association of Banking
Institutions (Ahiba) reported that loans to
the agriculture sector could increase to
7% this year.
On the infrastructure front, the state
plans to invest around $2 billion through
the end of 2017, including a big chunk
to help farm products get to markets. A
280-mile "agriculture corridor" is being
developed that will provide faster access
from production zones, including coffee
farms, to export ports.
"We are preparing the playing field.
The president recently inaugurated work
to pave a highway in the coffee zone to
move the product faster. We know what
needs to be done," Castillo says. LF
May/June 2016 - A Supplement to LatinFinance 15
Honduras_Agriculture.indd 15
5/24/16 3:33 PM
Table of Contents for the Digital Edition of LatinFinance - May/June 2016 - Honduras
Contents
LatinFinance - May/June 2016 - Honduras - HSCover1
LatinFinance - May/June 2016 - Honduras - HSCover2
LatinFinance - May/June 2016 - Honduras - HS1
LatinFinance - May/June 2016 - Honduras - HS2
LatinFinance - May/June 2016 - Honduras - HS3
LatinFinance - May/June 2016 - Honduras - HS4
LatinFinance - May/June 2016 - Honduras - HS5
LatinFinance - May/June 2016 - Honduras - HS6
LatinFinance - May/June 2016 - Honduras - HS7
LatinFinance - May/June 2016 - Honduras - HS8
LatinFinance - May/June 2016 - Honduras - HS9
LatinFinance - May/June 2016 - Honduras - HS10
LatinFinance - May/June 2016 - Honduras - HS11
LatinFinance - May/June 2016 - Honduras - HS12
LatinFinance - May/June 2016 - Honduras - HS13
LatinFinance - May/June 2016 - Honduras - HS14
LatinFinance - May/June 2016 - Honduras - HS15
LatinFinance - May/June 2016 - Honduras - HS16
LatinFinance - May/June 2016 - Honduras - HSCover3
LatinFinance - May/June 2016 - Honduras - HSCover4
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