Costa Rica: Rice Subsidy Only benefits Large Producers

In Costa Rica, the current mechanism mainly benefits 30 large producers, who received $80 million in subsidies in 2011.

Monday, May 14, 2012

Despite warnings from the WTO, Costa Rica continues to subsidize rice production, a benefit which actually goes to about 30 large companies, rather than groups of small producers, and is "an unnecessary risk" according to the former Foreign Trade Minister Alberto Trejos, who added that "it is like going to the Country Club in Escazú to hand out Family Allowance resources."

These are excerpts from an interview with Trejos in Nacion.com:

How did this distortion come about?
"We created the mechanism in order to help the small producers during a time of crisis, nine years ago, temporarily. That moment has passed, and we still have the mechanism in place as if nothing had happened, only that instead of limiting it to just benefit small producers, we have extended it so that 80% of it goes to the largest. These producers, not only grow the most on the farms but are also those who benefit from importing, making them even less helpless."

What should be done to resolve this problem?
"One way to fix this would be to eliminate (rice) pricing by law, raising money one way or another-through the Rice Corporation, including one part of the value of tariffs for shortages, as is done today, and , yes, assign just that part, limiting them to the $15.9 million allowed by the WTO agreements, which are almost 20 years old, and making sure it goes to the real targets, the poor rice producers who need to make a transition to higher productivity or another crop which their land favors better."

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