Following the announcement of the elimination of VAT on pet food, farmers are asking for incentives for the national industry to buy more local corn.
The announcement made by the President of Ecuador, Daniel Noboa, on January 22 regarding the elimination of VAT on pet food in Ecuador continues to generate reactions, this time from the balanced food industry.
However, the response from this sector is not directed at the announcement by the president, but at the arguments that part of the agricultural sector's leadership put forward in a request for the measure to only apply to the national product, in order to encourage the consumption of local corn by the industry that currently imports corn from Argentina.
Aprobal represents 14 feed companies in the Andean country that produce 53% of the livestock feed and 65% of shrimp feed in Ecuador, according to its website.
One of the arguments of the agricultural sector for this request, according to José Luis García, coordinator of the Committee for the Defense of Farmers, is that national companies are the ones that would benefit most from the import of corn, which “in many cases would be of transgenic origin and would cost US$ 18 per quintal upon arrival in Ecuador.” He added that “in some cases they arrive with subsidies from the country of origin.”
For García, the idea is that by applying the benefit of eliminating VAT to products made in the country, the local industry will also be encouraged to buy more national corn and reduce imports, since he assured that there is enough to cover national demand.
Jorge Josse, executive director of the Association of Balanced Food Producers (Aprobal), rejected the leader's statements and assured that imported corn, paying 30% tariffs, has an already nationalized cost of about US$ 15 per quintal. "If I didn't have to pay that 30% tariff, it would cost US$ 11.54 delivered to Guayaquil. Not US$ 18 as he says. Corn comes from Argentina where there are no production subsidies," said Josse.
Meanwhile, García also indicated that “of the last 95,000 tons of corn imported in 2024, 98% was done by 4 companies and the remaining 2% by 18 companies.” In this regard, Josse explained that the import quotas are distributed in exactly the same proportion in which the companies buy national corn.
“It is totally false that 98% of imported corn belongs to four companies.”
The Aprobal spokesperson pointed out that the average market price of national corn in 2024 exceeded US$19 per quintal and currently exceeds US$21 per quintal. “Although the minimum support price is US$16.50, it was never sold at that price. Finally, the rains are below normal due to La Niña. If winter continues like this, Manabí and Loja could see their corn crops affected,” warned Josse.
LICENSES HAVE BEEN APPROVED TO IMPORT 95,000 TONS OF CORN
On November 18, the Ministry of Agriculture and Livestock (MAG) approved import licenses for 35,000 tons of corn during a Consultative Council meeting that brought together representatives of the industry and corn producers.
These 35,000 tons are part of the 95,000 tons that the State portfolio approved on September 24 during another Advisory Council meeting. Until that date - November 18 - only licenses for 60,000 tons had been approved and with the approval of the remaining 35,000 tons the quota of 95,000 tons was completed.
This approval was given based on a MAG study that detailed that there is a deficit of 152,650 tons of yellow hard corn, taking into account the demand calculation from April 2024 to March 2025.
