Tariff exemption reduces the competitiveness of local producers

Guadalajara, Jalisco. Although it will serve to stabilize the prices of the basic food basket for the benefit of consumers, the measure adopted by the Mexican government to exempt the importation of 78 tariff items from tariffs as a strategy to face inflation will affect the competitiveness of local producers, warned the President of the Jalisco Agrifood Council (CAJ), Roberto de Alba.

“We do see a risk in the competitiveness of local producers,” said the sector leader in the entity, after pointing out that the measure should be accompanied by an incentive program to compensate for the impact.

In an interview with El Economista, De Alba Macías said that local producers are already impacted by the increase in inputs and hydrocarbons, so many will not be able to compete with the products that enter the country without paying a tariff.

“There should be a balance in the measure, to stabilize the prices of the basic basket on the one hand and on the other, support and encourage local production to be more competitive and not affect the economy of producer families,” he said.

Additionally, he said, it is necessary for the Mexican State to take care of the country’s phytosanitary situation, and in the case of Jalisco, the state authority through the Agency for Agrifood Health, Safety and Quality (ASICA) “do its job and be vigilant” to prevent the entry of diseases and pests that have already been eradicated in Mexico to avoid putting “Jalisco and its great export force” at risk.

According to the president of the CAJ, in the case of yellow corn there is no direct impact, since the country has a deficit and imports more than 90% of the consumption of the livestock sector.

national leader

With a contribution of 20% of the total food produced in the country, Jalisco is a national leader in the agri-food industry, said the president of the National Confederation of Industrial Chambers (Concamin), Antonio Abugaber Andonie.

“Of the national total, the state of Jalisco generates 60% of food supplements, 53% of egg production, 24% of candies, chocolates and beverages, and 21% of national milk production. With these figures, they show that they are a leading industry in Mexico”, he stressed.

Within the framework of the celebration for the 80th anniversary of the Chamber of the Food Industry of Jalisco (CIAJ), the leader of the industrial sector in the country commented that in the second quarter of the year the sector generated a Gross Domestic Product (GDP) of 1.2 billion pesos, equivalent to 21.5% of the national manufacturing GDP, with a generation of 880,000 direct jobs, of which 102,000 jobs correspond to Jalisco.

food potency

“Jalisco is a food-generating power in the country” and this is due to the unity of the sector, made up mostly of small and medium-sized companies, said industrialist Enrique Michel Velasco, director of Mazapán de la Rosa, the candy company. and most important confectionery in the country.

After receiving the 2022 Food Award, he told El Economista that, despite high inflation and a shortage of raw materials, the food industry in Jalisco remains firm and growing.

“The people of Jalisco are very united and we have many small, medium and large companies; then, when crises come, they hardly hit us because there are not large groups here like in other states,” said Michel Velasco.

He said that only in the confectionery sector are there inputs such as gelatin, glucose and starch, which have suffered “impressive” increases of more than 50%, which the industry has had to absorb.

Meanwhile, the president of the CIAJ, Antonio Lancaster-Jones, assured that the entity’s food industry contributes 11% of the country’s food GDP and added that “at the national level and in all parts of the world there is a food product made in Jalisco ”.

According to CIAJ projections, despite inflation and other adverse conditions such as the shortage of supplies and the rise in logistics costs, by the end of 2022 the state food industry will grow between 7 and 8 percent.

estados@eleconomista.mx