San José, Costa Rica, since 1956

Costa Rica’s Economy Also Soaked by Rains

Hopes for a strong economic finish in 2010 took a big hit this week as the country tallied the economic losses caused throughout the country by last week’s storms.

As the magnitude of the losses becomes clearer, a growing fear is that a diminished supply of agricultural products – such as beef, pork, milk, rice, lettuce, tomatoes, potatoes, onions, chiles, coffee, sugar, bananas and pineapples – will result in higher prices to consumers. 

“In circumstances like this, where collaboration is required across all sectors, we expect solidarity from the commercial sector,” said Economy Minister Mayi Antillón. “We will be on alert to assure that any large price adjustments are controlled, especially in the affected communities.”

While the Economy Ministry issued a nationwide alert to ensure that prices don’t skyrocket, the effects of the storms on the agricultural and export sectors have been devastating. As of Thursday, the Agriculture Ministry (MAG) reports that at least 278 farms nationwide were affected by the storms, resulting in the deaths of 6,583 cows, 114 horses, and 286 pigs.

“This is the livelihood for many of these farmers,” said Erick Quirós, director of regional operations for MAG. “With flooded farms and dead animals, they don’t have anything to turn to. The situation is very dire for many areas of the country.”

In addition to the deaths of animals and the destruction of crops, the nation’s farmers are losing revenue by the day because of impassable roads. The Public Works and Transport Ministry (MOPT) reported that 1,849 kms of roads throughout the country were affected by the rains. A total of 272 kms of roads and 85 bridges were closed. Given the need for quick delivery for meat, produce and dairy products, shipments are spoiling nationwide due to difficulties in transportation.

MAG reports that the farms most affected by the rains are located in Cartago, Pérez Zeledón, Acosta, Tarrazú, Alajuelita, Orosí and Aserrí.  

Soggy Golden Bean

Coffee growers, producers of Costa Rica’s “golden bean,” have also sustained significant losses because of last weeks rains. While the Coffee Institute of Costa Rica (Icafé) did not have specific figures regarding damage, growers around the country were reporting substantial losses.

“We expect total losses will be around 10 percent of the harvest,” said Pablo Jiménez, the general manager of Café Altura in Pérez Zeledón. “Many farms in this area and in Tarrazú (on the Pacific slope) had their plants driven into the ground by the storms. There is no way to recover those plants.”

The losses to the national coffee harvest because of the storm arrive at a time when the sector is already ailing. In August, MAG, Banco Nacional, the Development Bank System and Icafé committed $153 million to national coffee farmers over the next five years to revitalize diminished production (TT Aug. 19). In late October, Icafé lowered the estimate of the coffee harvest by 3.5 percent for 2010-2011 because of losses caused by a fungus known as “ojo de gallo,” also caused by excessive rain (TT Nov. 3).

MAG reports that the coffee harvest in Grecia, Naranjo, Sarchí, Acosta, Aserrí, Puriscal and los Santos will be down by about 10 percent. In 2009, international sales of Costa Rican coffee plummeted 41.7 percent to $198 million, down from $339 million in 2008.

“We’re concerned that if we keep suffering setbacks like this, the coffee sector might not be able to recover,” Jiménez said. “All we can do is hope that God blesses us with a better climate next year.”

Tourism Drenched

The tail end of the tourism “low season” was also punished by the rains, as closed roads and airports all along the Pacific coast resulted in cancellations from Guanacaste in the northwest to the Osa peninsula in the far south.

“I think we were lucky in that we didn’t have to have too many reservation adjustments, but we did have to fly in food for our guests because all the roads around us were closed,” said Brad Johnson, owner of the Aguila de Osa Inn, at Drake Bay on the Osa Peninsula. “I will say that, in my 20 years here, never have I seen it rain like this. It was torrential downpour for about three weeks.”

The hardest-hit tourism spot on the Pacific was the Quepos and Manuel Antonio area. Rains caused a collapse of a portion of the principal road that connects the central Pacific town of Quepos with Manuel Antonio National Park, and transportation in and out of the area was almost completely shut down.

“Almost all hotels had some cancellations and guests who couldn’t get into town,” said Harry Bodaan, Owner of La Mansion Inn in Manuel Antonio and President of the Aguirre Chamber of Commerce. “We had about 40 or 50 guests who couldn’t make it in, but it hasn’t been nearly the disaster that we expected it to be. The road has already been patched and damage that we thought would take months to repair has been repaired in days.”

Due to the rains and hazardous roadway conditions, Manuel Antonio National Park was also closed this week as a precautionary measure. The park is expected to reopen within the next few days.

All Hands on Deck

Workers from MOPT and the National Roadway Council (CONAVI) are out in full force repairing the roads and bridges pummeled by last week’s storms. And even while economic losses from the storm are being calculated, they are also swelling by the day. Repair efforts during the coming weeks will be vital to sustaining the nation’s economy during the last seven weeks of the year.

“We understand how vital the roadways are to the economy and we have workers around the country doing all they can to make roads and bridges passable as soon as possible,” said Public Works and Transport Minister Francisco Jiménez.

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