Tuesday 3 October 2023

The Same Old BS Protectionist Measures

Two proposals do not please industrialists and Conarroz initiated the preparation of a third plan. In Costa Rica the price of rice is fixed by decree (executive order).

Paying the bills


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Dollar Exchange

¢533.49 BUY

¢540.31 SELL

03 October 2023 - At The Banks - Source: BCCR

Paying the bills


In Costa Rica, a bill is being analyzed that would oblige industrialists to contribute to the Corporación Arrocera Nacional  (Conarroz) – National Rice Corporation – 5% of the value of the grain that is purchased under import schemes due to shortages.

Tons of Costa Rican Rice. From Theveggiegal.com

Although the aim of the two bills that are being discussed in the Legislative Assembly is to comply with a resolution of from the Sala IV (Constitutional Court) which ordered consumers to be incorporated into the board of directors of Conarroz, it was also used to modify in the Ley de Conarroz (law) texts other aspects to which industrialists are opposed.

Nacion.com reports that “…Those that provoked the most shock are related to financing of the Corporation, which receives, currently, 1.5% of the value of the rice delivered to the industry. The projects propose increasing this contribution to 2.5% shared between the agribusiness and the producers and one of them establishes a “compensation contribution” of 5% on the value of the imports made because of a declaration of a shortage.”

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“… The number of members of the Conarroz board of directors is also reduced and aspects have been modified such as the rice industries themselves being the entities to carry out quality tests on the rice that they buy from the producers. Given this scenario, Eduardo Rojas, representative of the industrialists on the board of directors of Conarroz, believes that neither of the two projects are satisfactory and, therefore, the Corporation is working on another proposal, which they hope to have ready in about three weeks. He added that he hopes there will be consensus on the project.”

Costa Rica – Agriculture – Rice

The majority of rice imported by Costa Rica is rough rice, but there is also a CAFTA-DR tariff rate quota for milled rice.

Rice imports from the United States reached 84,376 metric tons valued at US$30.5 million in 2016. Total imports increased in 2015 because of adverse weather conditions in the main growing region of Guanacaste.

The government imposed a higher duty through a safeguard measure on milled rice imports in order to limit imports from South America, which had grown in the past few years. The safeguard measure is being phased out and will be removed in 2019.

The Ministry of Agriculture and Livestock (MAG) has decreed a special safeguard for imports of brown rice, effective from 6 September to 31 December 2107. Imports from the US, Chile, Mexico and Central America were exempted from the measure. The measure involves raising the tariff to 46.67%.

The reality of the rice market in Costa Rica is that 68% of rice sales are managed by 3 large companies, and 12% of the profits generated by the premiums are concentrated in a single company.

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A study in May of this year by the Chamber of Commerce concluded that the fixing of the price of rice by decree not only did not result in improvements in productivity, but also revealed the way in which the amount of area sown is distributed as well as the profits of rice trading companies in the local market.

Key findings of the study:

  • 4% of producers own 44% of the area sown and 68% of the market’s sales are managed by 3 companies.
  • 11.8% of the profits generated by the premiums are concentrated in a single company.
  • Price fixing for rice, far from contributing to increased productivity and improving access conditions for consumers, actually results in industrialists and large producers being those who receive the most profits.

See summary of the study by the Chamber of Commerce of Costa Rica (in spanish).

Cost of living in Costa Rica

According to figures by Numbeo.com (updated November 2017), the retail cost of one kg of white rice is ¢1,777 colones (¢1,150 in the San Jose greater metropolitan area).

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Numbeo.com data, based on 2,988 entries in the past 18 months from 267 different contributors, updated November 2017, the cost of living in Costa Rica is 23.18% lower than in United States (aggregate data for all cities, rent is not taken into account). Rent in Costa Rica is 54.56% lower than in United States (average data for all cities).

Cost of living in Costa Rica:

  • Basic (Electricity, Heating, Cooling, Water, Garbage) for 85m2 Apartment ¢41,080 (US$73.35)
  • Internet (60 Mbps or More, Unlimited Data, Cable/ADSL) ¢28,965 (US$51.07)
  • Rent per month: Apartment (1 bedroom) in City Centre ¢292,406 (US$515.55)
  • Rent per month: Apartment (1 bedroom) Outside of Centre ¢211,665 (US$373.20 )
  • Rent per month: Apartment (3 bedrooms) in City Centre ¢511,457 (US$901.77)
  • Rent per month: Apartment (3 bedrooms) Outside of Centre ¢396,854 (US$699.71)
  • Buy Apartment Price per Square Meter to Buy Apartment in City Centre ¢868,500 (US$1,531.29)
  • Buy Apartment Price per Square Meter to Buy Apartment Outside of Centre ¢628,728 (US$1,108.54)
  • Average Monthly Net Salary (After Tax) ¢473,283 (US$834.47)
  • Mortgage Interest Rate in Percentages (%), Yearly, Fixed-Rate: 10.22%

Summary about the cost of living in San Jose:

  • Four-person family monthly costs: ¢1,420,451 colones (US$2.536) without rent (using our estimator).
  • A single person monthly costs: ¢387,277 colones (US$691) without rent.
  • Cost of living rank 312th out of 524 cities in the world.
  • San Jose has a cost of living index of 59.40

Editor’s note: the above numbers are subjective. The dollar price is based on convertion at today’s exchange rate. Please use the comment section below or post to our official Facebook page your numbers

Sources: La nacion; Central American Data; Numbeo

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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