Banana production costs in Nicaragua have increased between 30% and 35%, because of the rise in the price of agrochemicals. This in turn is the result of the coming into force of the tax reform.
According to banana producers, before the Tax Concentration Law approved at the end of February of this year was reformed, agricultural inputs were exempt from 15% of the Value Added Tax. However, with the changes, costs have increased considerably.
Alfredo Centeno Argüello, president of the Rivas Banana Growers Association (Aplari): “…These increases have had a negative impact on our production costs because the rise arises properly when there is no financing available for producers and, as more investment is required, some have opted to reduce their banana crops.”
Grower Miguel Pérez Romero claimed that before the increase in agricultural inputs occurred, he invested $2,500 to produce one block of bananas, ‘but now the expense exceeds US$3,300, because fertilizers and insecticides are more expensive’.”
The demand in the local market and the purchases made by three plants that collect fruit and then sell it to Honduras, Costa Rica and El Salvador, have been decisive for the business to stay afloat in this scenario of rising costs, explain the producers.
Todaynicaragua.com brings up CentralAmericaData reports that state that last year Central American companies sold abroad US$2,594 million in bananas, equivalent to 6 million tons. In recent years the average export price of the fruit has shown a slight upward trend, going from US$0.37 per kilo in 2012 to US$0.45 per kilo in 2018.