March 19, 2009

Peru's Agriculture Ministry will restore tariffs on sensitive agriculture exports, such as corn, soy and sugar, to protect farmers as commodities prices fall, a ministry spokesman said Wednesday (March 18).

 

Peru's government removed the tariffs early last year amid high commodities prices.

 

Agriculture Minister Carlos Leyton has requested President Alan Garcia again place duties on certain export crops, an issue that is under debate among his cabinet.

 

"The issue of the global crisis has brought down agricultural prices, so (the ministry) thinks it's appropriate to restore the tariffs," Jose Luis Patino, a ministry spokesman, told Dow Jones Newswires.

 

Other members of Garcia's cabinet, including his foreign minister and foreign trade minister, have made emphatic calls against any protectionist measures in the global economic downturn.

 

The National Convention of Peruvian Agriculture, or Conveagro, a non-governmental farmers' group, supports the proposal. In a statement, the group called tariffs, "the only defence tool that Peruvian agriculture has" against fluctuating agricultural commodities prices.

 

Peru's agriculture exports totalled US$2.6 billion last year, or 8.3 percent of total exports, a 32 percent increase compared with 2007. The sector comprises 7.6 percent of the Andean nation's gross domestic product.

 

Peru also is the world's largest exporter and second-largest producer, behind China, of asparagus.

 

Neighbouring Ecuador angered Peruvian exporters earlier this year when its president banned some imports and increased tariffs.

 

In January, Ecuadorian President Rafael Correa announced that the country would reduce imports by US$1.46 billion in 2009 to stave off the effects of the global financial crisis and guard against the outflow of US dollars, Ecuador's currency.

 

Correa had signed an agreement with importers to reduce the imports of 294 products, and to raise or establish tariffs on around 330 others.

 

The measure is currently being investigated by the Andean Community of Nations group, of which both Peru and Ecuador are members, to determine whether it is allowed under the bloc's statutes.