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Costa Rica approaches rice harvest goals

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Costa Rica approaches rice harvest goals
By Dennis Rogers
For The CAFTA Report


(Sept.23, 2010) Rice is a staple of the Costa Rican diet and is a sensitive subject in trade talks. Potentially, production could be high enough for national self-sufficiency, but at a substantial cost to either the national budget for subsidies, or the pocketbooks of the poorest citizens, if exports are excluded.

The business of rice in Costa Rica is complicated by price controls at wholesale and retail level; price supports, subsidized loans and, in some cases water, for growers, import duties and quotas and infrastructure limitations. A well-organized growers’ bloc defends its interests with a pliant regulator.

Most rice in Costa Rica is dry-land production, with some paddy rice in Guanacaste and the northern zone. Production is scattered around the rest of the lowlands, with concentrations around Matina near Limon and the area near the Panamá border on the Pacific side of the country.

Rice and the potential impact of subsidized imports from the U.S. was a major point in negotiations for the Central Aemrican FreeTradeTreaty. For opponents of free trade in general, the sentimental defense of Costa Rica’s small growers against competition from international agro-business was a approach with great appeal to the electorate. Pro free-trade elements hardly attempted to get beyond this myth and push the benefits of cheap imported rice to the poor.

Rice is totally excluded from Costa Rica’s free-trade agreement with China.

Given the proportion of the population that subsists mainly on rice and beans, the price of those staples has important social implications. EAch Costa Rican each year eats on average more than 50 kilograms, accounting for 22 percent of total calories, according to the U. N. Food and Agriculture Organization. In the Americas, only Surinam, Haiti, and Panamá get significantly more calories per capita from rice.

Reaction to price spikes related to the economic crisis of 2008 lead the central government to embark on a program to increase self-sufficiency in the production of basic grains. The Plan Nacional de Alimentos was the result. The plan’s goal is to increase national production to 80 percent of consumption.

Recent years have seen national rice production down to 50 percent of consumption with the remainder made up by imports, according to figures from the Corporación Arrocera Nacional.

Conarroz describes itself as a “public, non-governmental agency.”

As recently as 2007 production was at 155,000 tons, down from 266,000 in 2001. The 2006 crop  was affected by El Niño weather conditions with drought in Guanacaste. Low international prices at that time also affected local production.

Government price supports and favorable interest rates have lately resulted in considerable land converted from cattle ranching to rice, according to Minor Barboza, chief of operations for Conarroz. Climatic conditions have also been good.

Depending on the area planted during the second cycle that runs from January to June, the harvest should be about 270,000 tons for the year that runs from July 2010 to June 2011, Barboza said.

The 270,000-ton figure for 2010-2011 will be nearly the 80 percent of consumption sought by the government plan. At present there is a 35 percent duty on imported rice until the local supply is exhausted, when it drops.

The national plan for rice foresaw that processing capacity was inadequate for the 80 percent level, and recommended the rehabilitation of old driers and silos belonging to the Consejo Nacional de Producción. This did not happen in time for the quick increase in production, with private investment also inadequate. Most processing capacity in the country is in private hands.

The bottleneck has been with drying the grain not storage. Barboza said Conarroz and the industry have been taking measures to avoid heating and spoilage. To some extent rice can be aerated still in the truck, while waiting at the processing plant. Spoiled grain will end up as animal feed.




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