The government is allowing a duty free import of 30,000 tons of rice in order to meet domestic demand.
Juan Artica, undersecretary of Agriculture said that after a nationwide analysis revealed a shortfall in the supply of the grain to the market, an import has been authorized.
"He guaranteed that no price increase would be applied to the product by millers.
The agri-industry is requesting an import quota of 660,000 quintals of rice, farmers will only accept 240,000.
The country's rice production will not be enough to meet demand, meaning that rice must be bought from abroad, creating rifts between producers and manufacturers about how much should be imported duty free.
The producers say the national deficit will be 10.891 tons, while agribusinesses consider it necessary to buy 30,000 metric tons.
The Ministry of Industry and Commerce has authorized the duty free import of 4.980 metric tons of rice.
The move is in response to a deficit of 150,000 quintals in domestic production, due to poor production performance in the Colon area.
Freddy Torres, representing rice farmers said that the quota had been requested by them in the previous week, corresponding to 5% of the amount specified in the purchase and sale agreement of existing grains between the government and farmers.
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 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.
The proposal provides for a gradual shift in the pricing mechanism.
Within general guidelines, the proposal is valid for three years and aims to improve access to credit, training as well as business management and infrastructure.
"It also contemplates signing agreements for the National Production Council (CNP) to relocate their infrastructure and improve productivity in conjunction with programs from the Institute for Cooperation on Agriculture (IICA),” reports the article in Elfinancierocr.com.
WTO members launched a new campaign against the country due to its subsidies to rice production.
The claims were presented at the meeting of the Committee on Agriculture of the World Trade Organization (WTO) and point out that Costa Rica failed to limit their subsidies.
Costa Rica agreed not to exceed $ 15.5 million a year in subsidies and in the year 2010 it has gone over $ 100 million.
Starting January the 73.6 kg. bag will cost producers ¢ 20,050 ($ 39.3).
Producers had proposed a price of ¢ 21,372 ($ 41.89).
Oscar Campos, president of the National Assembly of Rice Producers, said that in exchange for a reduction in the price, the Government was to implement a program to improve competitiveness until 2020.
Oscar Campos, from Nacion.com, reports about the program "...
The Ministry of Economy signed a decree to reduce the price of rice to domestic producers.
The Minister of Agriculture and Livestock (MAG), Gloria Abraham, announced the decree without giving further details on pricing.
La Nacion, on its website, includes comments from the minister: "The price of rice paid by the industry to producers has been set at ¢ 24,315 per 73.6 kilos bag since 2008, ...
The multimillion dollar figures which Costa Rica spends on protecting rice production has sparked controversy between critics of the system and producers.
The issue was exposed to the public when a group of countries complained before the World Trade Organization (WTO) (see
The parties created a working group to come up with a solution to the conflict generated by rice subsidies.
The problem arose by questioning submitted to the World Trade Organization (WTO) from 35 countries.
La Nacion, reports on their website, "The basic point of the problem is the price of the grain. This is the only product which price continues to be set by law."
In 2009 the country's agricultural subsidy bill reached $92 million with "almost all going toward the rice sector".
Pressure from the World Trade Organization (WTO), which received complaints from 35 countries on this subject, has led the Costa Rican government to study a proposal to present to rice growers.
In an article published on Agroinformacion.com, the country's Trade Minister, Anabel González, is reported saying in a press conference that, "this is a technical issue and we are reviewing options. It is a subject we take very seriously due to the consequences it could have for the country".
The industry faces a gap between supply and demand, as seeding started behind schedule in the 2010/11 cycle due to the lack of adequate irrigation systems.
Neither farmers nor millers opposed to importing the product, but they remarked that the country needs efficient irrigation systems to assure continuous rice production.
“Hector Ortega, president of the National Rice Farmers Association, assured that Panama will face a supply deficit every year until irrigation systems are put in place” reported Prensa.com. “This extraordinary rice purchase was executed through the National Products Exchange, at an average price of between $17 and $18 dollars per quintal”.
Some intense rains after prolonged droughts have negatively affected 1.345 hectares of rice plantations.
Coclé, Herrera and Veraguas are some of the hardest-hit provinces.
"Agriculture Minister Victor Pérez ruled out both the possibility of importing rice, as a potential increase in the grain's price", reported Prensa.com. "The extraordinary reserve approved for 2010, which holds 2 million rice quintals, will be sufficient to cover the country's demand, said the minister".
Worse than expected production is forcing the country to import rice.
This was confirmed by Víctor Pérez, Minister of Agricultural Development, who warned of an even worse situation with the arrival of climate phenomenon "El Niño".
From Laestrella.com.pa: "Just 19% of the nation's output is done with irrigation systems. 81% of the country's production depends on rain".
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