Costa Rican businessmen complain that because of export subsidies granted to sugar producers in India, there has been an artificial increase in production, causing prices to fall below costs.
Édgar Herrera, executive director of the Industrial Agricultural League of Sugarcane (Laica), explained to Elobservador.cr that "... These subsidies are greater than those allowed by the World Trade Organization, in the order of $10 billion annually.
The nicaraguan government has announced a new subsidy on the interest rate for apartments´purchases worth up to $50,000 and constructed within buildings with no more than four floors.
In addition to this new incentive to purchase housing classified as social interest and in high rise form, the Ortega administration has announced that it will expand from $32 thousand to $40 thousand the maximum value of high rise housing that is eligible for the current interest rate subsidy.
December 31st is the deadline set by the WTO for Costa Rica, El Salvador, Guatemala and Panama to stop subsidizing exports from free zones.
In her article on Eleconomista.net, María José Saavedra analyzes "... the long road of extensions and extensions" which is coming to an end now with the World Trade Organization (WTO), having set 31st December 2015 as the last date for the elimination of these subsidies.
In 2016 scheduled tariff reductions for rice imports begin as part of the DR-CAFTA, posing a threat to local producers.
Nicaraguan rice producers have pointed to the efforts made by the sector to achieve self-sufficiency in supplying the local market, and report that the main competitor unleashed by this tariff reduction is the US which they point out subsidizes rice production.
After lowering the country's sovereign debt rating, the ratings agency also lowered the rating for the electricity company, anticipating difficulties in collecting payments from the Salvadoran government subsidies.
From the press release by Fitch Ratings:
Fitch Ratings-Monterrey-14 July 2015: Fitch Ratings has downgraded AES El Salvador Trust II's (AES El Salvador) foreign and local currency Issuer Default Ratings (IDRs) to 'B+' from 'BB' and revised the Rating Outlook to Stable from Negative. In addition, Fitch has downgraded the company's USD310 million senior unsecured notes due 2023 to 'B+/RR4' from 'BB'.
If there are no reductions in state subsidies and wages no type of fiscal reform will allow the country to achieve sustainability.
Since 2013 and via an Article IV report for El Salvador, the International Monetary Fund (IMF) has been warning the government about the need to take action to moderate wages in the public sector and correct poorly targeted subsidies, establishing strict controls over costs, which for the current year increased by $281 million.
The U.S.'s approval of a new farm bill may increase the competitiveness of the agricultural production in the Central American market.
The U.S. Congress has passed a farm bill that authorizes $956 billion over five years, including subsidies to domestic producers, eliminating direct farm subsidies.
"... The decision to end the system, established eighteen years ago, to make direct payments to farmers in cash , cost over $4.5 billion a year." It is estimated that "about $16 billion will be saved in government spending over the next decade ... ".
El Salvador's public debt up to May 2013 totaled $13.429 billion, representing 53.8% of gross domestic product in the country.
Eleconomista.net reports that "As of May this year the public debt of El Salvador, as a proportion of gross domestic product (GDP) amounted to 53.8%, representing a total of $13.4294 billion. That means that for every dollar the Salvadoran economy produces, slightly more than half is debt. "
In 1999, government spending on subsidies was $13 million, a figure which has multiplied 30 times, reaching $471 million in 2012.
In an event organized by the Salvadoran Chamber of Consulting Firms (Camsec) and the Union of MSMEs, union president, Jorge Daboub, revealed that while in 1999 the country spent $13 million on payments of subsidies, specifically for liquefied gas oil, by 2012 they had increased to $458 million, which represents an increase of 3523.1%.
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 a statement that the Government of Costa Rica sent to the World Trade Organization (WTO), the country said it will eliminate aid for rice farmers through a decree approved last month.
After a decade of operating in El Salvador, Grupo Calvo is asking the government to achieve its goal of making La Union into a pole for development.
According to Manuel Calvo, from Calvo Group CEO, in a decade of operating in the eastern port of El Salvador, there is still the thorn in its side of failing to become a great center for tuna. "Basically is lacks cheaper costs," said the businessman, who added that the company needs government support to overcome the obstacles in this new phase.
The Government of Colombia and the Coffee Growers Committee have agreed to an additional increase from $33 to $63 per load of grain to farmers with less than 20 hectares.
Growers with more than 20 hectares will go from receiving $33 to receiving $52 per grain load.
From a press release issued by the Presidency of the Republic of Colombia:
President Juan Manuel Santos said on Saturday that the government and the Coffee Growers Committee have agreed to further increase the Income Support for Coffee Growers from 60,000 pesos to 115,000 pesos ($33 - $63) per load of grain for farmers under 20 hectares.
The removal of the 6% return on exports has not been compensated in practice by the laws that are intended to have a dynamic effect on foreign sales.
Elsalvador.com reports that two years after MPs approved three laws intended to replace the return of 6% on exports, known as "drawback", the exporters have been "Without a bowl and without the soup".
Central American exporters are on alert after the Colombian government decided to increase the protection for domestic footwear and textiles industry.
These measures will apply to imports from those countries Colombia does not have a Free Trade Agreement (FTA) with. In addition, a subsidy will be granted to the coffee sector totalling around $44 million.
There should be time limits placed on any subsidies given to sectors of the population or the economy, so that they do not end depending on the state.
Martesfinanciero.com studied the case of subsidies granted by the Panamanian government, invoking the old adage "Give a man a fish and he'll eat for a day, teach him to fish and you’ll feed him for the rest of his life."