San José, Costa Rica, since 1956

Country’s Rice Growers Fear U.S. Trade Pact

RÍO LAGARTO, Guanacaste – Disillusioned with life as a beer vendor in the stuffy, smoke-choked suburban Central Valley, Carlos Bolaños packed his bags and headed for the hills of this northwestern province. He wanted to be a farmer.

He found himself working this yellow patch of a small valley between rolling hills, harvesting Costa Rica’s most basic crop: rice. “This is my dream. I’m living my dream. I just hope it doesn’t become a nightmare,” he said.

Here, in the well-irrigated plains north of Río Lagarto, about 15 kilometers north of the agricultural town of Cañas, anxiety is brooding in the heart of Costa Rica’s rice industry. Bolaños is one of hundreds of small rice producers here, many of them subsistence farmers, wondering whether upcoming harvests might be their last.

Costa Rica, a country seemingly addicted to rice and beans, is demanding more and more rice. At the same time, small and medium producers here are struggling against ravenous plagues, mounting debts, and competition from importers of U.S. governmentsubsidized rice.

Another storm cloud is brewing on the horizon for this troubled industry, prompting producers to plead with legislators not to strip them of their protections.

If the Central American Free-Trade Agreement with the United States (CAFTA) is ratified by Costa Rica’s Legislative Assembly, the national rice production industry says it will be left naked before foreign rice growers – largely U.S. farmers benefiting from billions of dollars of government subsidies.

“I’ll be left to cover myself with one hand in front and one hand behind,” said Bolaños, who has taken on “snowballing” debt to cultivate his 6.5 hectares. Producers warn that the national rice industry – particularly small and medium growers – could become extinct within a year if the controversial trade pact goes into effect.

Under CAFTA, the 35% tariffs on rice imports would be eliminated during the next 20 years. Perhaps more significant, rice wholesalers in Costa Rica would no longer be required to buy up all higher-cost, lowerquality domestic rice before turning to importers to buy the grain.

Opponents say CAFTA would mean massive poverty among already struggling farmers as industries like rice production slowly fade. And Costa Rica, where the average person consumes more than a kilogram of rice each week, would have to depend on imports for its dietary staple –the only food product subjected to government price controls.

Not only would that present an anomaly for a rice-rich culture – reliance on imports for a food found in practically every comida típica, from gallo pinto for breakfast, to arroz con pollo for lunch or casado for dinner – it could present a security issue, producers warn.

Costa Rica is the only of seven countries that has not ratified the trade pact. Polls showing declining support for CAFTA (TT, Aug. 18) and a proposal-congested Congress that has fallen behind schedule have complicated the pact’s fate.

President Oscar Arias, a staunch CAFTA supporter, told the daily La Nación this week the pact should be ratified by December.

Some legislators aren’t so sure, but in any case, the agreement must be ratified by March 2008 for Costa Rica to take part.

In the Guanacaste rice industry, where the bulk of national rice production takes place, the controversial trade pact is sowing uncertainty and fear.

Tariffs, safeguards and a domestic buying policy protect Costa Rica’s rice production industry, which according to the National Rice Corporation (CONARROZ) employs approximately 60,000 workers in production, logistics, fumigation, retail and more.

CONARROZ says 60% of rice consumed in Costa Rica is produced here. The rest is imported, mostly from the world’s thirdlargest rice exporter, the United States.

For years, the United States has put billions of dollars into the pockets of its rice producers to keep the industry competitive, drawing fire from the leading trade nation’s trade partners. International activist group Oxfam reported that the United States spends $1.2 billion a year to support its rice industry.

Agricultural subsidies in developed countries was a topic of heated debate during the Doha Round talks, and was ultimately the reason the talks failed last month (TT,Aug. 4).

In addition to being subsidized, the U.S. rice industry works with better technology, seeds and infrastructure.

“I’m not afraid of any U.S. farmers. But look at the advantages they have,” Bolaños told The Tico Times. “If they come here and work my land with my prehistoric seeds and old equipment, then we’ll talk about competition.”

CONARROZ, a leading CAFTA opponent, represents Costa Rica’s 1,100 rice growers and processors.

Critics and CAFTA supporters, including the Association of Free Consumers, say the organization has failed to help develop national rice production in any meaningful way, and call the association a “subsidized rice monopoly” benefiting a few wealthy rice growers and hurting rice consumers, many who live in poverty.

“It’s not important that we produce rice, but that all people can afford rice,” said association president Juan Ricardo Fernández. However, rice growers claim it’s a security issue.

CONARROZ president Oscar Campos said recent terrorist attacks and natural disasters in the United States have demonstrated how, if the United States becomes the hand that feeds Costa Rica, the country’s basic necessities will depend on the whims of U.S. politics.He said Costa Rica experienced a temporary “crisis” after Hurricane Katrina because the U.S. wouldn’t export any rice.

Fernández said having access to rice is not a problem because “rice is everywhere,” and Costa Rica produces other food items such as fruits on which it could depend during crises.

Pat O’Brien, an economist for the American Farm Bureau Association, a powerful U.S. lobby, said that if CAFTA were ratified, the Costa Rican economy would go through a transition. During this transition, subsistence farmers and small commercial farmers would feel the pinch and some industries like rice production would die off.

In the long run, though, producers will be better off, he said.

“It’s a painful transition … especially for Costa Rican producers who depend on rice as income and a food staple,” O’Brien said, adding that in five or 10 years, producers will have learned to apply their skills to viable industries such as sugarcane or melon production.

This week, Production Minister Alfredo Volio urged restructuring of the agricultural industry to prepare such “sensitive” agricultural sectors as rice for CAFTA implementation. On a recent hot afternoon, the sweaty, dirt-caked Bolaños drove his dilapidated pink jeep down farm roads showing off Guanacaste’s rice fields. He is slated to become a CONARROZ board member representing the Chorotega region of Guanacaste, a dry, sunny grid of hills and valleys quenched by irrigation canals fed by the massive LakeArenal reservoir to the northeast.

In this region, where about 60% of domestically produced rice is grown, the increasingly polemic CAFTA debate is tangible.

“The feeling against the United States is going to grow … I’ve talked to a lot of people who are harboring malevolence,” Bolaños said.


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