The Costa Rican Chamber of the Food Industry (CACIA) expressed strong displeasure once again, in the absence of a response by the government in connection with the application for the “shortage clause” which is used in case domestic production does not meet the requirements of internal demand.
Marco Cercone, President of CACI says the shortage clause applies whenever an agricultural product does not meet the demand. This instrument has existed for several years and aims to provide transparency and agility to the processes of importing products, most of which are raw materials.
That is why in a letter to the President, Laura Chinchilla, the Chamber sought prompt intervention because despite requests made to the Ministries of Agriculture, Foreign Trade and Economy no response has been received; even five weeks after the request, the MAG has not initiated any process, even though there is proof which demonstrates the shortage of this important commodity.
"There is no well-founded reason why the industry should pay a 46% disproportionate fee for a raw material, especially in the absence of local production. This leads us to believe there is bad faith by the administration, which goes against competitiveness in Costa Rica affecting the food industry and 4.5 million consumers whom will have to pay more for the food they buy, a situation in which the government has big responsibility," said Cercone.
For this reason manufacturers will strongly request President Chinchilla to immediately publish the decree enabling the shortage clause for potato imports.
Furthermore, they are asking President Chinchilla to act before the institutions mentioned before and proceed to remove the 46% tariff on industrial potatoes as a way to solve the problem long-term.
Costa Rican industry is paying 33% more for potato tubers because of a scarcity in the market, resulting in a call for a reduction of import tariffs.
In the country the high price of potatoes for industrial use compared to prices in other markets is already old news.
Now the Costa Rican Chamber of Food Industry (Cacia) is asking for the tariff, which currently stands at 46%, to be lowered, in order to import at a reasonable cost and in this way deal with local shortages.
The high demand from consumers has forced distributors to increase the import of this product.
While this is happening, oversupply in the local production of fresh potatoes is deteriorating domestic production. According to Fabian Segura, president of the Costa Rican Chamber of Potato Growers, there is an oversupply as a result of over-seeding, but what is having the biggest effect is the preference for frozen pre-fried potatoes.
The food industry reports monopolies in commodities like liquefied gas, high tariffs on imports and over-regulation.
The Costa Rican Chamber of Food Industry maintains strong opposition to the coming into effect of the Free Trade Agreement with China and asked the members of the Legislature to reject the signing of this and other trade agreements, until the country has solved a large number of structural weaknesses which hinder the development of competitiveness and innovation of Costa Rican companies.
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