President of Agrobanco on debt: "We intend to charge S / 300 million" | Photo 1 of 6 | Economy

How do you plan Agrobanco's debt recovery strategy?
LP: First, let's clarify that the debt will be collected because it does not extinguish itself by changing the legal person. We will charge to maintain the funding cycle. We must avoid the uncertainty that Agrobanco will liquidate, that will not happen. We have collections, so far this year, from S / 30 million to S / 40 million. And the other segmentation is the portfolio that has 80% stake in the bank, or 25 customers.

Here you have to start managing the departure of customers with discretion. One solution would be the neighbors because who better than the one on the side and interested in a property. There is a collection strategy for each type of customer.

When would the debt be paid and what amount would be advanced for this year?
LP: We plan to finish (year) with S / 300 million collection and this will be a continuous and permanent work. From what we owe until now, we hope to have concrete results in the next six months.

GM: Agrobanco is in a delicate situation. It is close to go under the supervision of the Superintendency of Banks, Insurance and AFP (SBS) and is not free to grant more credits. Currently, only 5 million shillings are lent monthly, which is essential because in July comes the biggest potato campaign and there are no loans to lend.

And how do you take the concerns of Congress?
GM: Of course, many worry about the fact that being an organ attached to Minagri, it may fall into the vice to allocate funds to other interests. This is not true because the idea is that Mi Agro has a directory consisting of Minagri, MEF (Ministry of Economy and Finance) and PCM (Presidency of the Council of Ministers). In addition, it has been proposed that Fonafe (National Fund for Business Financing of the State) will be accredited, in addition to the Office of the Controller. Even Oliva (holder of the MEF) left open the possibility that the SBS has a form of accompaniment. The law is modifiable.

Mi Agro is established as a state company, but also as a fund …
LP: This is not a fund, nor a bank. It is a public company that is intended to give credit. It is not financially either. It does not deal with financial intermediation. In this case, Mi Agro does not take deposits from the public, so the intervention of the SBS is not necessary.

Being a bank requires the investment of equipment, systems and people, but you do not have the resources. My Agro will not have any provisions that the SBS requires in order not to reduce the loan capacity. So, this is not a fund.

And why does Fonafe appear?
LP: Fonafe does not just see the funds, it's like a holding company. The state has a lot of companies and Fonafe oversees the entire group and must ensure the quality.

Fonafe is composed of members of the executive team such as the Minister of Economy, the Minister of Agriculture and other ministers who are part of the board of directors. administration.

And what role could the SBS have in Mi Agro?
LP: You must have something clear, agricultural credits are not equal to those of consumption or those that occur in other industries. The cycles are different. An agricultural season, which lasts between 6 and 7 months, has variables such as climate, price and market. Supervision for the agricultural sector must be like in the fishing sector, by campaign. What happens if we have El Niño in agriculture? It is not contemplated in superintendency models.

Minister, you said that 10 per cent 100 of the small producers do not really have access to credit. What mechanisms are being prepared to facilitate it?
GM: One of the conditions of access to the loan is that they have title deeds and we have planned to own about 400,000 properties over the next three years.

We have a PRT III project through regional governments, but we are working in a very limited way and many regional governments have not achieved that goal now. Another idea is that the work was presented in association between small producers. The other is that we have to articulate them to the market (national and international) through Sierra and Selva Exportadora, as well as with Agroideas.

And with the question of the diversification of production so that there is no surplus?
GM: When the problem of the potato (price) started, we identified the Brazilian market where the quality was good. The opening of the market is sought after. This week, we are negotiating an agreement with the Department of Foreign Affairs to incorporate agricultural aggregates abroad in Europe, the United States and Asia. We want to organize associatively because in this production and marketing chain there is a level of intermediaries that is necessary, but in this manipulation there are costs. We want the micro-producers to associate and process the product for it to be sold.

Could the National Crop Plan be fully implemented by 2019?
GM: We need to identify which sensitive products are the first potatoes, rice and corn. The potato is already. We have a project that integrates the creation of an information system. From here the end of the year, we hope to already have a portfolio of products on the onion, garlic and others.

MP Federico Pariona (FP) introduced a bill that proposes to maintain the Agrobanco. Is it viable?
GM: With the former president, we were working on the results she's got because this crisis does not come from months ago, but from years ago. There was a capital injection and even $ 340 million was lost. We proposed a $ 400 million investment to MEF, but there was no funding. We also solicited international companies and we did not have a positive response. So, right now, we can hardly save Agrobanco (with the current system). That's why a new proposal is derived (Mi Agro).

But is not it possible that Congress rejects the initiative?
GM: It's about reaching consensus and clarifying critical points. I think it's good that we plan and discuss the pros and cons of this model and if there is an adjustment to make, I believe that changes can be made to improve the management of Mi Agro .

There was also talk of an increase in the cost to producers because of the VAT increase …
LP: Yes, since this is not a bank, when you carry on an activity, the amount of interest you earn is affected by IGV (General Sales Tax), but Oliva has proposed a solution, that of the subsidy by the State, so as not to transfer the cost.

But it's a short term, is not it? Because in the long run, the subsidies are not sustainable.
LP: Of course, but he takes away a grant. This is why agricultural businesses have always had a profitable policy.

GM: This must also be associated with political support from the sector as there will be no point in granting a loan if we will not give the conditions to develop this agriculture.

It was said that one of the limitations to access credits was the titles. Ok, we need to resolve the issue of securities and we will inject resources to a higher degree. It was said that it would be useless to grant a loan if I did the same thing with a seed that is not of optimal quality, and we show that almost 11% or 12% use seeds quality and certified. Our proposal, for example, is another bill for the creation of a national seed authority, as a specialized technical body, because we need to encourage the use of quality seed that improves the quality of seed. productivity.

We need to improve associativity, we need to articulate them in the marketplace, we need to make them use quality seeds to be more efficient and to ensure that these credits are profitable and sustainable. In addition, if we generate profitability to the product, they will develop and improve their quality of life. It is a sectoral strategy and, in this context, one of the axes is financing.

Withdrawing subsidies is complicated because it's unpopular. Have you evaluated what range of rates could be defined in Mi Agro?
LP: If the idea is to encrypt a rate, we can not fix it because we can fall into the expectation that we can not encrypt it.

LP: The money that is delivered today must be used effectively, which means that we have to pay for inflation, that there will be a cost inherent in it. administration, at the cost of operation, and that they are costs. that we are going to reduce.

Now, an average of 17% is billed annually, which is now a competitive rate, but does not compete with the subsistence needs of the farmer who will not be able to pay you. But farmers on the coast, how much do they pay in a rural box or in a municipal box for a micro-credit business? They pay between 35% and 40%. At this moment, for agriculture, the price is relevant but it is not the main one. The bottom line is that they have money to do it.

When will you be able to evaluate the range of fees after the debate in Congress?
LP: Right now we are starting. While the solutions are given, it continues to work.

GM: We are working on regulation. Here we will define who is the small producer and what will be the limit of the individual credit.

I say this because the legislature begins in August …
LP: We will try to be more efficient. Today we have a floor of 17% and as the issue of collection, delinquency, the reduction of expenses begins to work, no doubt this will be transferred to prices (interest on loans).

On the extension of the law on agrarian promotion, the Congress has already published a first report. What does the executive think?
GM: Yes, I have an observation regarding the extension (13 years), because we have productive activities that require a longer extension time so that they have legal certainty for investment. And here you have the fruit sector with permanent crops and the forestry sector that will eventually be included.

If you remember, in the delegation of the legislative faculties, forestry activity is incorporated and these investments require a guarantee of at least more than 20 years, which was the original proposal. At least we will discuss it in the executive and the part of the Ministry of Labor will say what your responsibility is, but we have a position on that.

The term would be extended by 13 years and not by 20 …
GM: In reality, fruit activity has a longer horizon at 10 years, but not the forest. We need more than 20 years. It is true that the greatest development we have in the horticultural and fruit sector, which is not developed and where we have great potential as a country in relation to others like Chile or Ecuador, it is forest development. territory with the conditions of its development and we do not express it. So, the way to give guarantees is with this law of promotion.

When would you rate the opinion?
GM: Next week (this week) we will meet to evaluate it.

Have you projected the growth of the sector for the first half?
GM: Throughout the year we expect to exceed 4%. There is a recovery after the fall of last year, associated with natural phenomena. The development of agroexports continues to be one of the main drivers and we have citrus fruits, avocados, blueberries. However, we must work on the recovery of other more sensitive sectors.

Like what?
GM: We have the necessities. We still have to work. That's why we are with these integral projects for potatoes, with crop planning. We also have products like garlic and onion, because the onion also had a very sharp drop in prices.

Have you adjusted the projections of the value of exports at the end of the year?
GM: This year, with the gradual growth we have of 11% per annum, we estimate to reach US $ 7,000 million in exports this year and reach 2021 million US dollars.

And in the context of the trade dispute between China and the United States Do you foresee an indirect impact on Peruvian agroexports?
GM: It certainly is about business opportunities. We have a big advantage. First, we work with fresh produce, mainly in agro-export. And, second, we have a great advantage because they are positioned in the southern hemisphere.