The increase in the price of local milled rice in 2011, has boosted imports.
According to the Ministry of Agriculture and Livestock (MAG) as of September 2011 a total of 17,000 metric tons had been imported. "In the next three months of this year, imports could have tripled the 62,000 metric tons of 2010", reported Elfinancierocr.com
In the country it is the Ministry of Economy that establishes the price of rice, by decree, a measure that has been questioned by the World Trade Organization, who argues that more subsidies are being granted than allowed.
This is the amount of grain, in the hands of 17 producers, that has not been received by the industry, therefore the Costa Rican Minister of Agriculture will assume responsibility.
CONARROZ will buy 5,649 tonnes of unprocessed rice which is currently in the hands of 17 producers, promised the Minister of Agriculture and Livestock, Gloria Abraham Peralta, to a group of producers in the northern part of Costa Rica with whom she met.
Producers are complaining about the government’s unfulfilled promises to place their crops in the market, and demanding an end to rice imports.
Producers in the Guanacaste area are protesting again, demanding that the government respects a promise agreed last November, which, according to the rice growers, would resolve the placement of more than five thousand tons of rice which has been stored in dry silos, both public and private, since September 2011.
The Costa Rican Administrative Court has rejected rice farmers’ request for precautionary measures on October's rice imports.
The request asked to deny entry authorization to 350,000 kilos of husked rice from Argentina, on the basis that it did not comply with the rule that stipulates that rice must be fortified in its country of origin.
An article on Nacion.com states: "They also appealed to the ministries of Foreign Trade, Economy and Health to have the grain confiscated.
The signing of the agreement between the government, representatives of the rice sector and growers puts an end to the conflict caused by administrative price-fixing.
The new agreement guarantees that 100% of the 2011 harvest (53,000 hectares) will be purchased from rice growers by the industrial sector.
One of the key points of the agreement, signed on Thursday 3 November, is that the Costa Rican government promises to implement measures to prevent unfair competition in national rice markets.
Local problems generated by fixing the price of the grain have extended to the international arena, sparking protests from exporting countries affected by non-tariff related barriers put in effect.
Argentina's ambassador sent a protest letter to the local Foreign Ministry regarding the requirement that the husked rice imported by Costa Rica be fortified with vitamins in its country of origin.
In what seems to be a reaction caused by the rice lobby, the government is now requiring imported rice to be fortified in its country of origin.
11,400 quintals of grain loaded into 21 containers have been detained in the port of Limon, because they violate a rule which states that unhusked rice must have vitamins added to it in its country of origin. The requirement has existed since 2002, but has not be applied until last Friday.
The rice lobby held firm and the price of rice will not fall, at least until stocks from the current harvest are exhausted.
Rice manufacturers must submit alternatives to the current fixed pricing system, within a period of one month.
Producers in the South blocked roads in order to pressure the government to keep the price of a sack of 73.6 kilos unchanged, a condition required by manufacturers for the purchase of the current crop.
The Costa Rican rice sector is demanding that the government increases the controls for rice entering from Nicaragua.
Doubts about the true origin of rice coming into the country have led Costa Rican rice growers to request a review of rules of origin for imports, suspecting that the grain is entering in a triangular fashion.
Meanwhile, in Nicaragua, a country where rice production is insufficient to meet domestic demand, export of the grain is almost nonexistent, leading to suspicions that the rice is coming from other countries on the isthmus and then being transported to Costa Rica.
The National Rice Corporation has plans to purchase a plant for drying and storage of 'Rita' rice.
The purchase of the plant, owned by the National Production Council (CNP in Spanish) is subject to approval by the Controller General of the Republic.
The plant, which has not been in operation for 20 years, was valued at $1.3 million and will need about $200 thousand to make it useable, said Carlos Chavez, president of Conarroz.
The Costa Rican Ministry of Agriculture, along with producers, is looking for a quick solution to excessive rice production.
The solution to the problem is closely linked to actions that depend on the approval of tenders or finding more money, remarked Tannia Lopez, the Vice Minster of Agriculture.
La Prensa Libre published statements by the Vice-Minster, "Industrial companies are greatly concerned, because imports of milled rice keep rising, making them less able to receive farm grain. We are going to inform this to all regions so that producers can at least decide whether to plant or not, taking into account what is happening in the international market".
This time it was U.S. representatives who in a bilateral meeting expressed their anger to their Costa Rican counterparts over the excessive subsidy to rice farmers.
In 2010 $109 million was awarded in subsidies to the rice sector, a figure that exceeds by 700% the limit established in the Agreement on Agriculture by WTO.
"The meeting was chaired by the USA when the Committee on Agriculture of the WTO met, in which some 70 countries warned Costa Rica about incompliance", noted an article in Nacion.com
The amount of subsidy in 2010 was $109 million, 7 times greater than that authorized by the WTO, and has led to an increase in planted areas.
The Ministry of Foreign Trade in Costa Rica has released a statement which noted:
“Costa Ricans pay the fourth highest price for rice in the world.
The rice subsidy exceeded $109 million in 2010.
During 2010 $109 million in subsidies were awarded to the rice sector, reported the Government of Costa Rica to the World Trade Organization (WTO). This figure exceeds 700%, the limit set in the Agreement on Agriculture (AoA) of WTO, the international treaty governing trade in agriculture in the world and whose law is the law of the Republic.”
The country presented its new national rice policy before the World Trade Organization.
It aims to address competitiveness issues and to solve the lack of compliance with international regulations on domestic agricultural subsidies.
Although this new strategy was welcomed at the WTO, many countries believe it is not enough, especially because the country has not specified a date to remove the subsidy mechanism.
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