By Will Cavan
Executive Director
International Mango Organization (IMO)
Vista, California
www.mango worldmagazine.blogspot.com
August 27, 2011
Peru is the only country in the western Hemisphere that continues to subsidize exports.
This is the root cause of distorted export schemes that have no logical explanation and will ultimately destroy inefficient exporters.
Exporters are distorting Commercial invoices and misrepresenting data in order to qualify for Government subsidies such as 8% drawbacks based on commercial invoice data and refunds of a ridiculous 18% sales tax structure.
The country would do itself a favor if sales taxes were lowered and subsidies eliminated.
Ultimately, Peru cannot go on creating fictitious exports and the country will go through destructive withdrawals much as Colombia did when export incentives were eliminated in the mid 1990s.
When this day of reckoning does come, Peru will finally eliminate roughly 50% of the exporters on the books.
More importantly, Peru will become a responsible exporter and stop flooding markets as was the case last year when almost 50% more than forecast mangoes were exported to the USA market.
At present, the temptation to export is too tempting and Peru will continue to flood markets.
Time to level the playing field and let "real" exporters rise on their own merits.
Peru needs to follow the example set by Australia, Brazil and south Africa who only export less than 10% of production.
Without an internal demand for their own production, Peru will continue to destroy it's agricultural sector based on this false premise.
Currently farms are falling into default with banks everyday and this "Ponzi" scheme is forcing people who have no business in the farming sector to throw good money after bad.
Executive Director
International Mango Organization (IMO)
Vista, California
www.mango worldmagazine.blogspot.com
August 27, 2011
Peru is the only country in the western Hemisphere that continues to subsidize exports.
This is the root cause of distorted export schemes that have no logical explanation and will ultimately destroy inefficient exporters.
Exporters are distorting Commercial invoices and misrepresenting data in order to qualify for Government subsidies such as 8% drawbacks based on commercial invoice data and refunds of a ridiculous 18% sales tax structure.
The country would do itself a favor if sales taxes were lowered and subsidies eliminated.
Ultimately, Peru cannot go on creating fictitious exports and the country will go through destructive withdrawals much as Colombia did when export incentives were eliminated in the mid 1990s.
When this day of reckoning does come, Peru will finally eliminate roughly 50% of the exporters on the books.
More importantly, Peru will become a responsible exporter and stop flooding markets as was the case last year when almost 50% more than forecast mangoes were exported to the USA market.
At present, the temptation to export is too tempting and Peru will continue to flood markets.
Time to level the playing field and let "real" exporters rise on their own merits.
Peru needs to follow the example set by Australia, Brazil and south Africa who only export less than 10% of production.
Without an internal demand for their own production, Peru will continue to destroy it's agricultural sector based on this false premise.
Currently farms are falling into default with banks everyday and this "Ponzi" scheme is forcing people who have no business in the farming sector to throw good money after bad.
