Cattle ranching in Colombia is at risk of disease and unfair competition due to the illegal circulation of cattle, or “carousel” over the Venezuela border, said the head of a ranchers’ organization Thursday.
The illegal trade takes advantage of the fixed exchange rate and fixed prices in Venezuela to make money from the simple movement of cattle from Colombia into Venezuela, said Jose Felix Lafaurie, CEO of the ranchers’ organization FEDEGAN, in a letter to the government, reported W Radio.
The “carousel” of cattle subsequently happens because the government-fixed price for cattle in Venezuela is higher than the market price in Colombia, explained the FEDEGAN letter to the Ministry of Agriculture and the revenue agency, DIAN. Money is then made from this initial movement, but the cattle are also bought in dollars in Venezuela at the official exchange rate of $4.30Bs.F. (Venezuelan bolivar) to the U.S. dollar but can be immediately sold back at the inflated black market rate of 15Bs.F. to the U.S. dollar. Meanwhile, subsidised meat is smuggled back to Colombia without hygiene checks and sold there at market rates.
According to FEDEGAN, this represents unfair competition for the meat industry in Colombia and could put at risk Colombia’s status as free of Foot and Mouth Disease, the highly infectious cattle disease that requires infected cattle carrying to be destroyed.
FEDEGAN has therefore asked the Colombian government to take urgent action to stop the illegal “cattle carousel” across the border.
