Monday 26 September 2022

Costa Rica Rice Crop Failure Due To Drought: Could This Be A Blessing in Disguise?

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24 September 2022 - At The Banks - BCCR

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QCR BLOGS – Here is another one from 2015, speaking about the unfair Government subsidy to the Rice Farmers that Chaves says that he will now suspend and reduce the domestic price of Costa Rica rice:

Many of you will have either read, or heard that the current rice crop in Costa Rica is likely to be an almost complete loss, due to the drought being experienced from the effects of the “El Nino” ocean phenomenon, currently having an effect in the Pacific Ocean.

It is not often that a crop failure could ever be characterized as “a blessing in disguise”. This is especially true when in relates to the supply of rice in Central America, the single most staple part of the national diet of all of the countries in the Region.

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Costa Rica without rice for “gallo pinto” (rice and beans), is like the United States without oil, a security crisis in either scenario.
For years, the production of rice in Costa Rica has been under the close control of a cartel of rice farmers, small in number, but powerful in their governmental lobby, who have enjoyed a significant subsidy paid by the Costa Rican Government, to grow rice. Apparently, rice cannot be grown in Costa Rica at competitive market rates without this subsidy being paid.

This subsidy, of course, increases the cost of purchasing rice by the Costa Rica consumer, which poses a hardship, particularly on the poor. This practice has existed for decades in Costa Rica, in the face of knowing that imported rice grown in the U.S., or perhaps elsewhere, could be imported and sold in Costa Rica for less than the rice grown domestically. However, the route to this happening has been successfully blocked by the Costa Rica Government at the behest of this rice farmer cartel. I would suspect that these rice farmers are all doing very well with this subsidy being paid to them by the Government.
If the current rice crop in Costa Rica fails, as is predicted, the Government may be forced to look to less expensive imported rice to make-up any shortfall in the Country. This less expensive imported rice, if marketed fairly and correctly, could actually pose a windfall to the Costa Rica consumer, through lower prices for rice at the supermarket.

This, in my opinion, is what should have been happening all along, drought, or no drought. If domestic rice farmers can’t grow rice at competitive prices, then they should grow a different crop that is competitive, such as pineapple, or something else. There should be no subsidy paid by the Government to rice farmers to grow rice, especially when good quality imported rice can be offered to the Costa Rican consumers at a lower price.
The current Government has “staked its claim” on reducing poverty in Costa Rica. Importing less expensive rice would certainly be in-keeping with that philosophy. If the market should change in the future to favour rice growing in Costa Rica at competitive prices, the land will always be available to do just that. Costa Rica cannot be held hostage over pricing by any foreign country from which imported rice is purchased.

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Richard Philpshttp://costaricacanadalaw.com/
Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose. Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking. To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney; Email: rick@costaricacanadalaw.com, Website: www.costaricacanadalaw.com

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