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5.8.2. GoG Policy
Prepared by Fintrac Inc.
To protect domestic production, the importation of yellow maize in Guatemala is governed by
both DR-CAFTA and WTO tariff quotas. Guatemala's WTO Schedule of Commitments includes
tariff quotas for 22 agricultural products, but tariff quotas are applied only to imports of rice,
wheat flour, yellow maize and apples. Quotas are activated only in the event of a domestic
market shortfall, although Guatemala normally imports volumes greater than those bounds.
Maize imports are subject to an out-of-quota import tariff of 15 percent.
The CAFTA-DR TRQ for yellow maize was set at 525,000 MT in 2005, with a 25,000 MT annual
increase. A total of 633,000 MT tariff-free has been allocated for 2011 to date (based on annual
totals for 2011 of 200,000 MT from WTO quota and 650,000 MT from CAFTA-DR). 117
All maize
that enters under the TRQ pays zero tariff; outside the quota, a 15 percent tariff is imposed.
5.8.3. Starch Substitution
Although maize is a staple across Guatemala, yellow maize is a staple (and a preferred staple)
for only a small region in the Western Highlands. The sale of yellow maize for use in animal
feed and processed snack foods would not act as an disincentive to local production of white
maize since the two products are not viewed as substitutes. Nor would the sale of monetized
yellow maize act as a disincentive to local production since domestic production only meets
about 20 percent of domestic demand. The only risk is undercutting the market price among
animal feed manufacturers, which could support uncompetitive behavior among those market
actors who benefit from an abnormally low sales price.
5.8.4. Competitive Environment
The animal feed industry is composed of a variety of companies of all sizes, from verticallyintegrated
poultry producers who manufacture feed for their own animals, to companies that
focus on both livestock rearing and marketing as well as animal feed manufacturing, to
businesses engaged exclusively in the manufacture and marketing of feed. The figure below
illustrates the number of companies involved in the importation of maize in different forms:
117
According to records of the Department of Foreign Trade Administration of the Ministry of Economy accessed August 25, 2011.
BEST Analysis – Guatemala Chapter 5 – Monetized Food Aid 70