Central American Rice Farmers Fear Bankruptcy

For the Central American Rice Federation, the bankruptcy of more than 62 thousand rice farmers in Central America and the Dominican Republic is imminent, due to the abolition of import tariffs, a measure that is part of the implementation of the DR-CAFTA Free Trade Agreement.

Tuesday, June 8, 2021

Representatives of the sector consider that if the commercial liberalization of rice cultivation continues, there will be an increase in unemployment and poverty in their agricultural areas, since more than 265,000 people depend directly on this crop and approximately 990,000 people indirectly, and foresee serious social, economic and political implications due to the effects of the Treaty.

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The free trade of rice in DR-CAFTA, will put farmers in the region at a clear disadvantage against their competitors in the United States that have permanent subsidy programs in the Farm Bill, which have come to represent between 20% and 40% of the total income of rice producers in the United States, which ensures them competition in the market against regional producers who do not have this type of program, says the Central American Rice Federation (FECARROZ).

The US has not promised to eliminate these distortions in trade with its partners in the region, which shows that DR-CAFTA will not generate opportunities for countries that face serious employment and development problems, adding to the problem in the rice sector, according to a statement issued by the association.

As stated in the document "... the visit of the Vice President of the United States, Ms. Kamala Harris, to Guatemala and that of Secretary of State Antony Blinken to Costa Rica, accentuates the concern of migratory flows and recognizes the need to seek comprehensive solutions with its regional partners. The United States has put on the table the need to create jobs in the most vulnerable areas, which are focal points of migration due to precarious living conditions. Rice-growing areas generate rural jobs and mitigate poverty and cause migration."

Within the framework of Harris' visit to Guatemala, FECARROZ delivered a letter to the Vice President of the United States. See complete document.

Research by CentralAmericaData specifies that between 2019 and 2020, rice purchases from Central American companies to U.S. companies decreased by 12%, going from $206 million to $181 million.

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