With vast natural resources, a diverse climate and varied topography, agri-business opportunities abound as Colombia’s role as a global food supplier continues to grow. According to the UN Food and Agriculture Organisation (FAO), Colombia receives the most rainfall of any Latin American country and ranks 10th globally for precipitation. Its varied elevations also provide for growing a number of raw products, ranging from cut flowers to coffee, bananas and cocoa.

The sector was the first to see the benefits of the historic peace agreement between the government and FARC, a guerilla group that has engaged in armed conflict in the country for more than half a century. Fighting meant rural areas were disproportionately affected by insecurity, violence and a lack of institutional support, and many areas were either dedicated to illicit crop cultivation or not developed for agriculture at all. This peace has brought agricultural and other economic interests to previously undeveloped rural areas, but has also raised concerns about the need to protect Colombia’s virgin biodiversity.

Size & Performance

According to the latest government statistics, the agriculture sector grew by an estimated 4.9% in 2017 and 2.4% in 2018, thanks to a number of key products such as poultry, eggs and pork. In 2016, the most recent year for which data was available, arable land covered 40.3% of Colombia’s total territory, a significant jump from five years before when arable land covered 37.6%. Meanwhile, in the five years leading up to 2018, Colombia’s cultivated land expanded by a compound annual growth rate (CAGR) of 7.03%, according to research firm Mordor Intelligence.

The National Administrative Department of Statistics (Departamento Administrativo Nacional de Estadística, DANE) reported that agriculture, food and fisheries made up 20.1% of the total value of exports from January to March 2019, almost exactly equal to that of the manufacturing sector. In GDP terms, the sector represents around 9% of all economic output. Between January and March 2019 coffee was Colombia’s leading agricultural export, with $640.7m exported during the period, a 2.2% increase on the same period in the previous year. This was followed by flowers and cut foliage, accounting for $410.7m and representing 6.2% yearon-year (y-o-y) rise; and sugar-based confectionery at $33.9m, a y-o-y drop of 25.2%.

Import and Export

The US and the EU are Colombia’s two largest export markets, accounting for 33% and 24% of if its agricultural exports, respectively. From January to April 2019 exports fell by 2.1% compared with the time period of the year before. This presented a mixed picture across segments.

While agricultural exports fell by 86.7% to Trinidad and Tobago, shipments to the US and the Netherlands rose by 6.9% and 31.7%, respectively. Between January and March 2019 imports reached $1.68bn, a 3.5% y-o-y rise. The latest data shows that in 2017 Colombia imported a total of $44.3bn worth of products, with maize, soybean meal and wheat comprising the largest agricultural imports; at 1.8%, 1.1% and 0.93% of total goods sent to the country, respectively.

Structure & Oversight

The sector is overseen by the Ministry of Agriculture and Rural Development (Ministerio de Agricultura y Desarrollo Rural, MADR). Its central objective is to “formulate, coordinate and evaluate policies that promote the competitive, equitable and sustainable development of agricultural, forestry, fishery and rural development processes, with decentralisation”. The MADR has three main policy pillars. First is the commitment to the consolidation of institutions to support growers and stakeholders; second is to boost the formalisation of rural property; and third is to focus on boosting efficiency and competitiveness through productivity and profitability.


Around 20% of Colombia’s arable land is dedicated to coffee production, employing around a quarter of the agricultural workforce. The country is the world’s second-largest coffee producer and also the globe’s largest producer of one particular type, mildwashed Arabica, considered a favourite internationally. Global medium-term demand for coffee is expected to grow by 8.5% in 2019-23, according to Euromonitor, putting Colombia in a strategic position to increase production to meet growing demand. Over the last decade the industry has been successful at boosting production through a number of measures, including tree replanting, which reduced the age of trees from an average of 15 to seven years.

According to the National Federation of Coffee Growers of Colombia (Federación Nacional de Cafeteros de Colombia, FNC), in the six-month period from October 2018 to April 2019 coffee production fell from 7.31m 60-kg bags, to 6.98m bags, a 4.4% y-o-y decrease. However, at the same time coffee exports rose from 6.69m bags to 7.13m bags, representing a y-o-y increase of 6.5%. While May 2019 saw global coffee prices hit an almost 14-year low, the government and the FNC have pushed a medium-term target of producing 18m 60-kg bags per year in anticipation of rising global demand.

The answer to boosting productivity, according to the FNC, lies in exploiting land that had previously been considered off limits for agriculture. Much of this land is located in areas previously controlled by armed groups that forced growers to change production to coca, the raw ingredient of cocaine. In addition, many areas in departments such as Meta, Putumayo and Caquetá were devoid of infrastructure to support coffee growing, from either the government or the FNC, and as a result there is little expertise in these areas.

To boost productivity and provide support for coffee company Nespresso, the Howard G Buffett Foundation and the government announced in May 2019 that they would join forces to provide financial support to help growers in the border town of Nariño close down coca plantations and plant coffee. The foundation will also invest $2m to improve transport and sanitation infrastructure, including better water supply, roads and a health centre. The programme will help farmers will replace 10% of their trees annually ensuring they are disease resistant, provide technical support and give farmers additional fertiliser aid.


According to the Colombian Banana Growers Association, in 2018 production rose by 2.52% due to increases in crop planting. These additional areas set aside for bananas saw Colombia move up one rank to become the world’s fourth-largest exporter of bananas behind only Ecuador, Costa Rica and Guatemala. Banana exports were worth $859m, up 1% from 2017, with 82% of the total sent to the EU, followed by the US with 13%.

Through the process of formalisation, many smaller producers are gaining certificates to export their products to high-value markets. One of the most recent developments in this regard was the export of 3500 kg of bananas from Valle del Cauca to the US, sent by 28 small growers who had obtained their licences in December 2018. As of that month the Colombian Institute of Agriculture had registered 5895 small producers across 13 departments, with plantations covering an area of 48,000 ha. However, as with many crops, bananas are susceptible to the effects of climate change. Heavy rains at the start of 2019 have reportedly led to a 30% fall in banana crops in some areas.

Palm Oil

Colombia is the largest exporter of palm oil in the Americas and the fourth largest globally, behind Indonesia, Malaysia and Thailand. Production increased by 42% in 2017 to reach 1.6bn tonnes and a total value of over $3.3bn. In a 2018 statement, the FAO attributed Colombia’s significant increase in production to the adoption of sound agricultural practices.

However, as the peace deal between the government and FARC remains in place, vast untouched areas of the Colombian Amazon are now at risk of being converted into farmland. In 2016, the same year the peace deal was signed, the rate of deforestation increased by 44%, with much of this is blamed on growing agricultural and mining practices. However, there are around 40m ha of land available for cultivation, of which only 7m ha is currently being used, which could provided new areas for oil palm plantations. Stakeholders have also suggested converting land used for inefficient cattle production to palm cultivation.


A particularly strong growth segment in agriculture is livestock. In the first quarter of 2019 egg, goat, pork and sheep production were up 5.6%, 6%, 10.1% and 59.6%, respectively, compared to the same quarter in 2018. This is ahead of the Latin American average of 3.7% and a global average of 2.1%. Colombia has a strong relationship with many export markets in Asia, including Vietnam, which represented 37.5% of the country’s poultry shipments, followed by Hong Kong (27.4%) and Thailand (1.6%). In total, the poultry segment grew by 4.8% in 2018 and looks set to continue expanding as foreign investment increases. In November 2018 US multinational food producer Cargill acquired 100% of Colombian poultry producer Campollo for COP340bn ($116.3m), making it the leading poultry supplier in the country. This comes after the US multinational purchased Pollos El Bucanero in June 2017.

Greener Pastures

In light of greater pressure on the industry to comply with global environmental best practices, livestock production is being encouraged by many global organisations to take a sustainable approach. A number of Latin America countries, including Colombia and Ecuador, have adopted sustainable livestock programmes as a result.

One such scheme is the World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes, which provided a $20m grant to farmers in the Orinoquía region with the aim of significantly boosting output while minimising damage to the surrounding environment. The initiative involves promoting more effective land use planning, providing technical assistance to ensure the promotion of low-carbon farming and ensuring production practices are followed.


Partly because of agriculture’s high potential and partly due to the relatively high proportion of Colombians that work in the sector, there has been a lot of movement recently to secure international investment. The Inter-American Development Bank, the International Finance Corporation and foreign governments including the US, Germany and Canada have begun providing more funding to promote sustainable development practices, reduce poverty levels and boost financial literacy in agricultural areas.

On a local level, traditional financing has historically been difficult to attain for many Colombian farmers; however, there are institutions which provide credit and other bank services. One of the most prominent of these is the Agricultural Sector Finance Fund (Fondo para el Financiamiento del Sector Agropecuario, FINAGRO). As part of the MADR, FINAGRO provides loans to farmers, as well as direct cash grants designed for different agricultural purposes.

Such incentives include the Rural Capitalisation Initiative, which provides money to farmers who invest in modernising production; the Forest Incentive Certificate, a subsidy to plan and sustain forest plantations for five years; the Technical Attendance Incentive, which offsets technical assistance expenses by up to 80%; the Agricultural Insurance Incentive, subsiding food production to allow producers to pay insurance premium; and the National Agricultural Recovery Programme, which helps producers who are defaulting on their loans. Programmes are designed for a range of small-, medium- and large-scale producers.

In the first two months of 2019 FINAGRO increased its lending by 21.6% to COP500bn ($171m). Demand from small producers rose by 7.7%, medium producers by 9.9% and large producers by 28%. In that same period, lending increased to meat, rice, poultry and coffee producers by 17.7%, 14%, 12% and 9.4%, respectively.

The Agricultural Bank of Colombia (Banco Agrario de Colombia, BAC) is another financial institution run by the MADR. It offers a portfolio of products, with competitive interest rates and grace periods, and covers nearly 94% of Colombia’s territory. In March 2019 BAC launched a portfolio of products for export-orientated producers. These include bank drafts, pre-financing options for certain exports and lines of credit. This comes after an announcement in November 2018 that BAC would team up with US rural agricultural bank CoBank to boost exports and encourage internationalisation of clients. BAC is currently also exploring alliances with other international banks.


The main and most costly input for agricultural producers in Colombia is fertiliser, the majority of which is composed of imports. These reached $175m during 2017, representing an increase of 47.1%. Some of the principal source markets for urea include China, which provides 15% of the total, followed by Trinidad and Tobago (11%). However, due to the low margins on many agricultural goods, farmers’ purchasing power for high-quality fertiliser is limited, and many farmers opt instead for cheaper local alternatives.


The most recent data available from the World Bank put the percentage of irrigated agricultural land at 1.5% in 2013. Data from the FAO for the same year puts the figure at 900,000 ha, of which 45,000 ha was serviced with groundwater and 855,000 ha with surface water. Almost half of all irrigated land was located in two departments, Tolima and Valle del Cauca, with 196,416 ha and 220,923 ha, respectively. Meanwhile, 11 departments had no irrigated land at all, including Amazonas, Arauca, Buenaventura, Caquetá, Chocó, Guainía, Guaviare, Putumayo, Quindío, Vaupes and Vichada. Many of these are in the country’s tropical lowlands, which receive sufficient, regular rainfall.

Rice is particularly dependent on irrigation. In more remote areas of the country, land is not connected to the electricity grid, so farmers are often dependent on diesel generators to effectively water their crops. As this is costly, there are efforts to provide alternative sources of irrigation infrastructure to previously excluded producers. Germany’s Federal Ministry for Economic Affairs and Energy has brought renewable power to some rural areas, in particular in Neiva, to allow farmers to perform localised irrigation in a more efficient and environmentally friendly way.


A combination of Colombia’s tropical location, varied climate and localised industrial capabilities make it an ideal location for agro-industry. According to the MADR, the agri-food sector accounts for over 20% of national employment and 5% of GDP per year. In 2017 the export of foodstuffs from Colombia reached $7.3bn, accounting for 49% of non-traditional exports and reaching over 164 markets.

Fruit processing is a niche to be exploited for both domestic and international markets. In a bid to boost industrialisation in the segment, the ZonaPaz Agroindustrial Free Trade Zone was established in 2017 in the department of Cauca. The zone spans an area of 14,000 sq metres and was built with an investment of more than $4bn. As a joint venture between the University of Cauca, and the departmental and municipal governments of Cauca and Piendamó, priority focus will be given to the production of certain local crops, such as quinoa, panela, avocado, fique and yucca. The project is expected to create around 300 direct and 2500 indirect jobs from the use of the zone as an export platform to strategic markets. As of mid-2018 the country was home to 112 free zones, of which 13 (11%) were dedicated to agro-industry. Of these, seven were focused on palm oil, two each to ethanol and food stuffs, and one each to sugar and fruit.


The development of agro-industry will provide more opportunities to ethanol and biodiesel producers. Globally, forecasters expect the biofuels market to grow at a CAGR of 3.47% between 2019 and 2023. In addition, Colombia has increased its ethanol fuel blend mandate to 10% for fuel sold domestically to stimulate internal demand. Estimates from the US Department of Agriculture put Colombia’s annual ethanol production capacity at 600m litres, produced across seven plants; production reached 480m litres in 2018. Biodiesel is supplied by eight plants with a total capacity of 700m litres and an estimated production of 620m litres in 2018. However, by 2020 it is expected that domestic demand will hit 1.4bn litres of ethanol and 1.2bn litres of biodiesel, which will require either a significant hike in production and possible an increase in imports.


According to DANE, Colombia is still largely unsophisticated in the use of technology in the countryside. Around 66.7% of producers do not use any irrigation system, while 83.5% do not receive any technical assistance. There are, however, a number of small-scale tech initiatives designed to help farmers boost productivity and increase access to markets. The farm-to-restaurant Frubana app, for example, is used to connect restaurants directly with producers. It uses a built-in feature to inform distributors of the most efficient routes to ship fruit and vegetables to clients. Since it came on-line, the app has grown by 50% per month, acquired more than 1000 clients and reached annual sales of $6m. It was announced in May 2019 that the company would expand to Mexico and Brazil.

Meanwhile, Colombian banana exporter Tecbaco and the UK’s Cranfield University are working on a project to use mobile apps to help growers better plan their irrigation practices. It involves the use of remote-sensing imagery, weather stations and soil moisture detectors to develop irrigation models. Coffee, cocoa and tilapia are set to be the focus of similar projects.


Colombia’s geographic and climatic advantages, alongside its numerous developments, stand it in good stead to become a more prominent regional and global player in food production. Efforts to boost financial capacity, especially of small-scale producers, should lead to greater productivity and higher margins for stakeholders along the value chain. Further prioritisation of agro-industry is a key trend that will play out over the coming years, as the country looks to add value to its wide array of produce, with a particular focus on lucrative export markets in Europe, the US and beyond.

However, it remains to be seen how the country will manage balancing its need for a higher agricultural output with its obligation to protect its diverse ecosystem. Whether the industry can become a driver of broader economic growth remains to be seen, but the rebirth of rural Colombia will be key to any future success.