Special report
Venezuelan controls encourage major meat and livestock smuggling to Colombia
Between January and September this year, Colombia’s tax and customs police (Policia Fiscal y Aduanera – POLFA) made over US$1 million-worth of seizures of meat and livestock in the form of 106 tonnes (t) of beef, 4t of pork, 11t of chicken, 1,024 live cows, 243 pigs and 23,100 chickens.
However, the authorities and the sector believe this is just a small percentage of what crosses the border and, according to estimates from Colombia’s main meat and milk guild, the Federation of Colombian Ranchers (Fedegan), the cost to the national beef industry alone is US$84m a year.
"Contraband is creating a serious situation for legal competition, which is tremendously harmful to those who pay their taxes and comply with Colombian regulations," said Carolina Hernandez, Fedegan’s internal auditing and collections coordinator.
The price differentials that have fuelled the trade are a result of the Venezuelan government’s attempts to control the cost of staple goods and currency exchanges.
Strict price controls on beef and chicken have been in place since 2009, when the government of then President Hugo Chávez introduced the policy to protect consumers from the effects of runaway inflation. He died in March 2013, but his successor, President Nicolás Maduro, continued the policy.
The economic incentive to sell abroad, created by artificially low prices, is compounded by Venezuela’s fixed exchange rates, which further increase profit margins for smugglers.
There are currently three official rates for Venezuelan bolivares (VEF) set by the government: VEF6.30, VEF10.50 or VEF50 to the dollar. But on the border, 2,000 Colombian pesos (COP) – roughly US$1 – buys 89 Bolivares.
The epicentre of the trade is around the city of Cúcuta, where smugglers bring meat, piled into stripped-out cars and the back of pick-up trucks, across the border, using clandestine dirt tracks that skirt official control points.
"It is brought along the trails without any consideration [for sanitation] or refrigeration; the meat is in a really bad state," said Lieutenant Colonel Rodolfo Carrero, the head of POLFA’s Cúcuta operations. "This has very grave health consequences."
Livestock is also usually brought in by the trails, either in trucks or, in more isolated areas, on foot. In the case of cattle, the animals’ origins are disguised by distorted brandings.
The trade in contraband livestock has also converged with another illegal practice that plagues the sector – clandestine slaughterhouses, which are usually little more than farmyards or empty buildings and lack even the most basic sanitary controls.
In Cúcuta, the contraband trade has proved so lucrative that it has spurred the growth of a specialised mafia dedicated entirely to smuggling and distributing meat. The police have captured several members of the group, but have had to let them free as they are unable to prosecute unless the value of the goods they are carrying exceeds US$14,000.
The criminalised remnants of Colombia’s right-wing paramilitary movement, which are active in and around Cúcuta, also cash in on the trade by charging smugglers their own form of import taxes. Further to the north, in the state of La Guajira, police say the guerrillas of the Revolutionary Armed Forces of Colombia (FARC) not only charge "taxes" but have also begun smuggling cattle themselves.
The impact of the trade on the sector is not limited to lost business; the cheap contraband meat on offer is also pushing prices down for legal traders.
"People are seeing a significant drop in their income as a result of the pressure from low prices because of all the contraband," said Hernandez.
The trade also has the potential to stymie Colombia’s plans to become a meat and livestock exporter. The country is currently under evaluation by the World Organisation for Animal Health (OIE) to ensure it meets the required international sanitary standards for export, and while – thanks to extensive vaccination programmes – Colombia is free of diseases such as foot-and-mouth and classical swine fever, Venezuela is not.
"The international sanitary body is tremendously worried about the contraband situation in the country – and at the moment they are doing the evaluation of the country’s admissibility to the external market," said Hernandez.
For the past year, the sector has been working closely with law enforcement authorities to tackle the trade and, according to Hernandez, significant progress has been made, with a substantial increase in seizures and the targeting of smuggling networks.
However, she feels much more must be done to reduce the damage smuggling is doing to the sector.
"Faced with US$84m in losses, it is still insufficient," she said. "The Colombian state needs to put in more resources – human, technical and economical – to the bodies dedicated to controlling this."
