Costa Rica: $104 million in Rice Subsidies in 2011
In the last 5 years the pricing system in force has transferred more than $390 million from the pockets of consumers to rice producers.
Wednesday, May 9, 2012
A statement of the Ministry of Commerce reads:
Rice sector subsidies in excess of $100 million for the second year
San Jose, May 8th, 2012. Today Costa Rica reported to the Committee on Agriculture of the World Trade Organization (WTO) that subsidies on rice in 2011 reached $104 million, which exceeds by more than 650% the annual amount permitted under the WTO’s Agreement on Agriculture.
Under current law, the price for producers is fixed as a precautionary measure by the Administrative Tribunal at ₵ 22,076.4 per bag of 73.6 kg of clean dry seed.
This grant, of more than $100 million, is generated by the existing price mechanism, which requires the Costa Rican consumer to pay for the third most expensive rice, according to the Market Monitor (February 2012) of the United Nations and Agriculture Organization (FAO).
Since 2007 Costa Rica has not fulfilled its commitments in this area to not exceed the ceiling laid down in the Agreement on Agriculture of $15,945,000 a year. In 2007 the subsidy received by rice producers amounted to $23,291,081, in 2008 it was $62,477,559, in 2009 $91,743,858 and in 2010 $109 million.
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The Costa Rican government has informed the WTO that from March next year it will cease the pricing system by which domestic rice producers are subsidized.
From 1st March 2014 rice subsidies will be removed, which could end the dispute with the U.S. and other WTO members on account of aid given to rice farmers.
In the past four years, the number of farmers engaged in rice production increased from 743 to 1,200, drawn by a fixed price system which in 2011 was covered by a subsidy amounting to $104 million.
The recent judgment by the Administrative Court annulling a presidential decree and ordering an increase in the price of a 73 kilo bag of rice to almost $49, confirms the wisdom of farmers who switched to growing the grain, confident that the subsidy levels would continue at astonishing levels, despite protests from other countries, the opinion of the World Trade Organization (WTO), and consumers of a product based on the local food basket, who pay one of the highest prices in the world for rice.
WTO members launched a new campaign against the country due to its subsidies to rice production.
The claims were presented at the meeting of the Committee on Agriculture of the World Trade Organization (WTO) and point out that Costa Rica failed to limit their subsidies.
Costa Rica agreed not to exceed $ 15.5 million a year in subsidies and in the year 2010 it has gone over $ 100 million.
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