A statement of the Ministry of Commerce reads:
Rice sector subsidies in excess of $100 million for the second year
San Jose, May 8th, 2012. Today Costa Rica reported to the Committee on Agriculture of the World Trade Organization (WTO) that subsidies on rice in 2011 reached $104 million, which exceeds by more than 650% the annual amount permitted under the WTO’s Agreement on Agriculture.
Under current law, the price for producers is fixed as a precautionary measure by the Administrative Tribunal at ₵ 22,076.4 per bag of 73.6 kg of clean dry seed.
This grant, of more than $100 million, is generated by the existing price mechanism, which requires the Costa Rican consumer to pay for the third most expensive rice, according to the Market Monitor (February 2012) of the United Nations and Agriculture Organization (FAO).
Since 2007 Costa Rica has not fulfilled its commitments in this area to not exceed the ceiling laid down in the Agreement on Agriculture of $15,945,000 a year. In 2007 the subsidy received by rice producers amounted to $23,291,081, in 2008 it was $62,477,559, in 2009 $91,743,858 and in 2010 $109 million.
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The Costa Rican government has informed the WTO that from March next year it will cease the pricing system by which domestic rice producers are subsidized.
From 1st March 2014 rice subsidies will be removed, which could end the dispute with the U.S. and other WTO members on account of aid given to rice farmers.
The amount of subsidy in 2010 was $109 million, 7 times greater than that authorized by the WTO, and has led to an increase in planted areas.
The Ministry of Foreign Trade in Costa Rica has released a statement which noted:
“Costa Ricans pay the fourth highest price for rice in the world.
WTO members launched a new campaign against the country due to its subsidies to rice production.
The claims were presented at the meeting of the Committee on Agriculture of the World Trade Organization (WTO) and point out that Costa Rica failed to limit their subsidies.
Costa Rica agreed not to exceed $ 15.5 million a year in subsidies and in the year 2010 it has gone over $ 100 million.
The country presented its new national rice policy before the World Trade Organization.
It aims to address competitiveness issues and to solve the lack of compliance with international regulations on domestic agricultural subsidies.
Although this new strategy was welcomed at the WTO, many countries believe it is not enough, especially because the country has not specified a date to remove the subsidy mechanism.