ASOCAN: Plants from the Canary Islands to the World
The Canarian Harvesters and Exporters of Flowers and Live Plants Partnership (ASOCAN, its Spanish acronym) is a non-profit agrarian association created by flower and live plant producers in the Canary Islands. We have a high representation, since more than 90 % of the agrarian companies of the ornamental sector in the Canary Islands are members of the Partnership. Since 2009, we also manage the representation of the gardening companies within the sector, but we only have the majority representation in the island of Tenerife in this field
Which is the main activity of the company nowadays?
ASOCAN has many specialized activities within one general, which is the defense of the interests of the ornamental sector in the Canary Islands. Among these tasks or specialized activities we can highlight the following:
- Assistance and subsidies: although we are aware of the fact that the agriculture should be viable without subsidies, the reality shows that our geographic location as an ultra-peripheral region and the duty of fulfilling the European regulations in all the aspects of our activity (phytosanitary, traceability, working and fiscal activity…) push us to claim financial compensations that can allow us to keep on being competitive compared with our main competitors, Africa and South America, which in several occasions work apart from these regulations. All of this makes the existence of a partnership which represents your interests, makes clear the existence of the sector and obtains this sort of compensations that make sure the viability and the future of the sector in the agrarian activity extremely important.
- Tax problems: assistance and subsidies are not everything; we also have to defend the interests before the Public Administrations when they do not understand the nature of our product or activity. A clear example is the VAT and IGIC decrease in flowers and plants obtained these years, from 21 % to 10 % in the Spanish Mainland and from 7 % to 3% in the Canary Islands. I add the VAT in the example because we worked in and presided the Working Commission for obtaining the reduced VAT for flowers and plants from 2013 to 2014, and we obtained it in 2015. The IGIC took one more year; we got it from 2016 on.
- Phytosanitary regulations: we are continuously negotiating and in contact with the competent Administration in relation to the following topics:
+ Authorized phytosanitary products.
+ Nurseries register.
+ Plant Health –FITO
- Promotional plans: despite all of our partners compete with each other, we reach agreements in order to establish joint commercial strategies, especially related to the external markets; hence we come up with the Promotion Plans signed with PROEXCA, in which a series of promotion actions that follow a commercial strategy previously developed between the sector and PROEXCA are established. These actions include fair attendance, market research or direct missions with entrepreneurs from certain countries of commercial interest.
Apart from these objectives previously mentioned, ASOCAN participates with the Employers’ Association in the negotiation of the Field Regional Agreement (Convenio Regional del Campo), participates in the negotiating table for obtaining the improvement of agrarian insurances, processes any sort of agrarian insurance policy, and it also signs collaboration agreements more advantageous for its partners with public and private bodies, such as agreements regarding the purchase of phytosanitary products, financial institutions, technical advice, working and fiscal agreements…
As you can see, there are many activity fields in which ASOCAN participates, all that can be of general interest for the sector o even all that fosters the communication among its members.
Why do you think that looking at the overseas markets is interesting for the business development?
Regions like ours need FOREIGN TRADE more than any other region. Exportation allows us to achieve stability in the region’s balance of trade; if we only had local production and importation, our shopping cart would be much more expensive, the region living cost would be higher. We have to find activities that allow us to equilibrate this balance between what gets inside and what goes outside; tourism is the main activity that provide us richness which allows us to keep that stability, but we can not only rely on that, we have to extend the activities that provide us richness and they must help tourism to maintain the stability of the balance of trade. Honestly, ASOCAN thinks these other generating activities are basically related to the exporting agriculture, such as the banana and other tropical fruits, flowers and plants. Besides, maintaining the stability of the balance of trade is not the only reason, we should keep a natural image of the Islands in which the exporting activity complements the environment and the landscaping of our region.
In ASOCAN, we are convinced that the foreign market is the clearest path for the growth of the agrarian sector. In our case, flowers and plants, we have a product recognized abroad; there is logistical connection with the main markets, since tourism is the main economic activity of the region through air transport. Also, the import of goods containers we need to subsist through air transport, forces us to get that everything that gets into (containers) the Canary Islands full leaves full again.
We also have now a series of tools that help exportation and of which we have to make use, such as the Compensation for the Freight Transport, and others we have to improve, such as the Aid to the Marketing Out of the Canary Islands. Currently, this one goes to our clients, but we are negotiating with the Agriculture Department the change of beneficiary to the exporter producer, so that it really boosts the exporting activity of our sector.
Which projects are you currently carrying out abroad? In which countries and why?
ASOCAN, and together with PROEXCA, has focused our actions on markets with a high ornamental consumption and also where we could find established logistics to help us give supply services consistent with our production level. For this reason, we have mainly focused on EU countries such as Germany, Holland, France, Italy, United Kingdom and Portugal, apart from the Spanish Mainland, obviously, our main market at present.
He have performed some market investigations in Middle East and Africa, we cannot stop trying interesting markets with a high ornamental consumption, due to its big urban development, but, as I have already mentioned, we have only succeeded where there are enough connections to assure the viability of the exporting activity.
At this moment, and for a long time, we are participating in cooperation with PROEXCA in well recognized international fairs such as IPM ESSEN in Germany, the most important of the ornamental sector at the global level, and also in other fairs, smaller but significant for our sector, such as VIVERALIA in Alicante and IBERFLORA in Valencia.
In addition, this year we want to carry out a market investigation in Morocco, because we want to try to set our outdoor plant in this country, which is having an outstanding urban development that started years ago and which also has a climate condition similar to ours, so our plants’ adaptation is almost hundred per cent guaranteed.
Which products or services do you think that are more interesting in order to internationalize a company?
At present, with the quality as the primary base of every product, the main aspects we have to take into account in order to start the internationalization process in our sector are the labour and the freight costs. Therefore, we have to focus on crops with a low work intensity and maritime transport (much cheaper than the air transport). Consequently, these premises are currently fulfilled by the ornamental plant, specially the palm, cactus and fatty families.
This does not mean that other vegetal species, such as the proteas, do not have a huge international future, but it does mean that they should hold a condition that makes them exceptional; in the proteas’ case, this uniqueness is the flowering period, which is opposite to that of the biggest proteas producer, South Africa. This allows us to be competitive and one of the regions with this flower’s biggest production in a specific period of the year.
What problems have you faced when going abroad? How did you solve them? Did you find support?
Our geographical condition as an ultra-peripheral region does not allow us to reach all the interesting places guaranteeing good services, so we have focused on those in which we have some logistic guarantee of continuous transport.
On the other hand, while they have roads, highways, high-speed trains and many more connection improvements among the different EU regions in the continent, here in the Canary Islands we only have air and sea, which has been almost steady during decades, the physical connection compared to the rest of the EU. This is why keeping the freight transport compensation is essential, without it we could not compete in the European market. In the last years, we have had increases and decreases in this compensation, depending on the budget allocation of the year in question. ASOCAN carries out every year the corresponding pressure to get the sufficient financial sheet, but the level of uncertainty is very huge, so the companies desert many times and they do not get that compensation. This is something we should not allow and which does not goes in the same direction of the said compensation. We hope that with the approval of the new REF (Economic and Fiscal Regime) for the Canary Islands, this compensation becomes a constitutional right, so that we eliminate the current uncertainty.
Another important issue is our exceptional condition as phytosanitary State. Before the EU we are the third country in the phytosanitary aspect with the current existent regulation. This increases the documental and physical inspections compared to other regions of the EU. We do not have free freight movement within the EU; our high degree of protection of the importation of vegetal material influences the exportation, highly increasing the cost of the exporting activity. In order to modify this, we agreed with the corresponding Public Administrations some action plans to reduce the impact of these inspections when exporting our products into the EU, our major market.
Have you already achieved any accomplishment internationally?
The current exportation level is not as it was decades ago, it is considerably lower. It is hard to acquire the international achievements of the 80’s, when we did not have competence from Africa or South America, but having got there in the past and being where we currently are, we know the journey. Honestly, I do not think we will reach the best numbers of the past; the farming conditions are different, but I do think we can considerably increase our export activity with the new conditions and crops (ornamental and aromatic plants, proteas, and other cut flowers).
Nowadays, our exportation numbers are nearly 30 million Euros. I do not think we will get to the 70 million of our best years, but I believe that we are able to situate ourselves with an exportation esteemed in 50 million. That would be out best international accomplishment.
Why would you recommend going abroad?
As I have previously mentioned, PRODUCING and EXPORTING should be major words in our region. I would recommend to the Public Administrations to take good care of the companies that produce in the Canary Islands and which export as well. Tourism is vital, but we cannot fill the Islands with hotels or urban zones, we must develop economic activities compatible with tourism and the natural environment of the region, and the agriculture is.
Agriculture is complicated; I admit that recommending it is a risk, because sometimes even when you do everything properly the wind, a drought, or a new plague can destroy your work. In other words, sometimes the company’s result does not depend on the good administration of the farmer, but also on the luck; this is why I think that you have to like agriculture or invest in it. However, I think that those who really know it never give it up, so I invite people to know it, to analyze the different crops that can be exported, because the foreign trade can bring so much to the Canary Islands. There are many crops that can be focused on the exportation and which have a bright future in the Canary Islands, due to their amazing climate conditions and political stability, something that our main competitors really lack. Flowers, plants, aromatic plants or even tropical crops such as, for example, avocado, papaya or mango have a huge future as exportation products.
Antonio López Cappa
Managing Director of ASOCAN