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 plan to reduce subsidies on electricity tariffs could be executed within four years, between 2018 and 2022, and in coordination with the business sector.
The Ortega administration's plan is to start with revision of the current subsidy schemes and develop a strategy to reduce them gradually.
Bayardo Arce Castaño, adviser of Economic and Financial Affairs at the Presidency, explained: "...The IDB is going to lend us $65 million to make progress in the regulation of the electricity sector.The idea is that this reorganization take place between 2018 and 2022.It is not that tomorrow or the first of January of 2018 the subsidy will be removed or the rate lowered or raised, it is not like that.This is a four-year affair. "
The law reform approved by the National Assembly raises from $32 thousand to $40 thousand the cap to receive a subsidy for social interest housing and up to $50 thousand for housing in condominiums and apartments.
With the reforms, the ceiling for receiving the subsidy for social interest housing is increased from $32 thousand to $40 thousand for a single family dwelling and up to $50 thousand for multifamily housing, the latter is a new feature of this initiative, specifically for condominiums and apartments.
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.
The approved law states that 25.2% of the savings caused by the reduced oil bill will be used to repay the debt of the electricity sector.
From a statement from the National Assembly of Nicaragua:
Deputies to the National Assembly approved this December 13, an amendment to the Law on Variation of the Consumer Electricity Rate, Law 898, which states in Article 4 that of the savings in the electricity tariff due to slumps in the price of bunker fuel, 55.5% will be allocated towards reducing energy rates for residential consumers consuming more than 150 kwh per month.
The union of builders plans to increase the supply of these homes to 6000, and is asking the government to guarantee more direct subsidies and improve access to financing.
The president of the Chamber of Builders of Nicaragua (Cadur), told Elnuevodiario.com.ni that"... 'We are asking the Government to guarantee us 2,000 direct subsidies, grants for housing supply, since 50% of our housing supply is of social interest and sales made with this type of housing need to be guaranteed by a grant for the deposit'."
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.
The Chamber of Constructors expects to sell build and 6000 new homes with funding supported by the reform of the Law on direct subsidies.
An article on Elnuevodiario.com.ni reports that "... In September and October 300 homes were sold, an accelerated performance which is a result of the approval of the direct subsidy through Invur, these are families who do not have a deposit of 10% for affordable housing, " said Hector Lacayo, first vice president the Chamber of Builders of Nicaragua (Cadur). "
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.
In order to compete with pork that comes in from the US, Nicaraguan producers are seeking government support to build a food processing plant.
As import quotas for pork from the United States increase, Nicaraguan pork producers are seeking to improve their cost structure in order to better compete with the imported product.
Marcos Umanzor, president of the new Chamber of Pork Producers of Nicaragua, said that "...
The recently approved amendment to the Housing Act provides a subsidy of 2.5% in the interest rate for mortgage loans that are not greater than $32,000.
Responding to industry demands and seeking to motivate the new housing market, the recently approved reform also provides, as well as the subsidy, that any bank can apply the exemption of 15% from Value Added Tax (VAT) for mortgage loans with this same ceiling rate.
A bill to subsidize the production of peanuts in the U.S. and an initiative that would restrict imports of machine-made tobacco has caused concern in the private sector.
The agricultural bill and the initiative sent to consultation by the FDA in the United States includes the establishment of $10 as the price parameter for classifying cigars as premium and in the case of peanuts, raising production of grain by 30% through the application of an agricultural subsidy.
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 ... ".
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.
Industrialists have denounced sub invoicing in the sale of live cattle in Guatemala, as a fraudulent method of getting subsidies.
From an interview in Elnuevodiario.com by Leslie Nicholas Lacayo with Alfredo Marín, vice president of the Chamber of Industries of Nicaragua, who explains the causes of the decline in exports to Venezuela, a major beef market: