San José, Costa Rica, since 1956

Country’s Cattle Industry Has Beef with Gov’t

THE country’s cattle farmers have a bigbeef with the government, which theyaccuse of doing nothing to help the sectorprepare for the yet-to-be-approved CentralAmerican Free-Trade Agreement (CAFTA)with the United States.The National Cattle Farmers’Corporation (CORFOGA) – a non-governmentpublic institution that represents thecountry’s cattle farmers – is demanding thegovernment grab the bull by the horns andstrengthen the sector before CAFTA isapproved.If it doesn’t, subsidized beef from theUnited States will trample Costa Rica’s cattleindustry, CORFOGA says.RONY Chaves, president of CORFOGA,said the government promised inJanuary it would enact legislation and providecooperation funds to help the cattle sectorsurvive and thrive under CAFTA.However, five months after negotiationsconcluded (TT, Jan. 30), the government hasyet to move forward with the proposed measures,Chaves said.“We are very worried. We have notreceived a response from the governmentabout proposals to strengthen the meat-productionsector in light of the opening of thebeef market under CAFTA,” Chavesexplained.“We’re not afraid of competition. We’reafraid of doing nothing. We’re not asking forhandouts. We want the tools we need to beable to continue,” he added.Wálter Ruiz, vice-minister of agriculture,says the Ministry of Agriculture andCattle (MAG) is committed to helping cattlefarmers prepare for CAFTA. He asked farmersto be patient, and promised MAG woulddeliver results.“We are willing to help them,” Ruiztold The Tico Times this week. “Theyexpect a fast answer. We’re working onmost of the projects they have proposed.We’ve made advances on some of them,but are behind on others. This happens inthe government.”CAFTA calls for a gradual but completeliberalization of the beef trade between theUnited States and Costa Rica. The status ofbeef from other Central American countriesis not affected by CAFTA because it isalready liberalized.If CAFTA goes into effect, Costa Ricawould have a yearly 10,300-metric-ton duty freeexport quota that will increase by 5%each year. Costa Rican beef exports wouldenter the United States duty-free 15 yearsafter CAFTA is approved.All cuts of U.S. beef would be able toenter Costa Rica duty-free within 15years of CAFTA. No tariff reductionswould take place during the first fiveyears. Immediately after CAFTA goesinto effect, U.S. exports of fine, primeand choice cuts, as well as edible scraps,would enter the country duty-free.SINCE December, Costa Rica has had aban on U.S. beef imports following reportsof the discovery of a cow infected with“Mad Cow” Disease in Washington state(TT, Jan. 16). The ban remains in place.However, the Agriculture Ministrysaid this week it is studying the possibilityof lifting the ban on beef importedfrom areas of the United States certifiedfree of the disease.Costa Rica’s 58,000 cattle farmersproduce 70,000 metric tons of beef ayear. The majority (85%) is produced forthe national market.On average, each Costa Rican consumesabout 17 kilograms (37.5 pounds) of beef ayear. Only two companies – Montecillos andEl Arreo – export beef. Most is sold toPuerto Rico.Dominican Republic, which recentlyjoined CAFTA (see separate story) and theCaribbean Community (CARICOM), withwhich Costa Rica recently signed a free tradeagreement (TT, July 2), are seen as thebiggest potential export markets for Ticobeef, according to CORFOGA.COSTA Rican cattle farmers are seeingred when it comes to the threat of “popular”cuts of meat – cheap beef obtained from discardedU.S. dairy cows. If compensationmeasures aren’t taken, the arrival of thesecuts – subsidized by the U.S. government –will destroy Costa Rica’s cattle industry,Chaves said.To counter the threat of cheap foreignbeef flooding the market and make themost of the export opportunities createdby CAFTA, CORFOGA has drafted aplan to improve the sector’s competitiveness.The plan was presented to the ministersof Agriculture and Foreign Trade,Rodolfo Coto and Alberto Trejos, respectively.CORFOGA’s plan has four “pillars” –reactivating the sector, improving quality toincrease exports, informing consumersabout the benefits of beef and promotingexports.The plan includes measures to improveresearch and transfer of technology betweencattle farmers, promote production of naturaland organic beef, create quality certificationstandards and launch a national ad campaignpromoting the consumption of redmeat, Chaves explained.CORFOGA expects the plan to cost$26.3 million. The association recommendsfinancing the project using part of the $350million loan the Inter-American DevelopmentBank (IDB) offered Costa Rica to helpincrease its competitiveness and prepare itfor CAFTA.The Legislative Assembly is currentlydiscussing the loan. Recently, President AbelPacheco said he would condition the loan onthe approval of the much-delayed PermanentFiscal Reform Package also being discussedby the Legislative Assembly.MAG is evaluating how to finance theproject. Ruiz says the ministry has not discardedthe possibility of including it as partof the loan.Chaves has said CORFOGA is willingto cover 10% of the cost of the programs,through bonds issued by the institution.CORFOGA receives $2 for each headof cattle that is imported or slaughtered.The bonds could be sold to collect fundsand later repaid using CORFOGA funds,Ruiz said.Ruiz said the government hasadvanced on two bills that are also ofvital importance for the sector – modernizationof MAG’s animal-health divisionand the cattle theft law. Both bills wereprepared by MAG with assistance fromCORFOGA and are now in the hands oflegislators, he said.The vice-minister is optimistic about thesector’s future under CAFTA.“I’d say we have a great advantage as acountry,” Ruiz explained. “We have a strongorganization that combines the governmentand the producers looking out for the sector.Between the two, we are generating proposalsto strengthen the sector and make surethere continues to be cattle ranching formany years to come.”

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