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Agricultural Policies in Costa Rica

image of Agricultural Policies in Costa Rica

Costa Rica’s strong agricultural sector is underpinned by the country’s political stability, robust economic growth and high levels of human development.  The sector has achieved significant export success, yet raising productivity and staying competitive in world markets will require efforts to address bottlenecks in infrastructure, innovation and access to financial services.  Maximising Costa Rica’s comparative advantage in higher-value niche products will depend upon more efficient services to agriculture, including better implementation of programmes, improved co-ordination among institutions, and reduced bureaucracy. While overall protection for agriculture is relatively low compared to OECD countries, it is nonetheless highly distorting to production and trade. Managing the transition to scheduled liberalisation presents an opportunity to reform costly policies, and to implement an alternative policy package with new investments in innovation, productivity and diversification, supported by transition assistance where needed. Costa Rican agriculture’s vulnerability to extreme weather events is expected to worsen with climate change, and even while the country is among global leaders in environmental protection, sustainable development and climate change mitigation, further adaptation efforts will be necessary.

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Executive summary

Costa Rican agriculture has a strong base upon which to build. The success of the sector has been underpinned by the country’s political stability, robust economic growth and high levels of basic health and education service provision. The agricultural sector has achieved significant export success, concentrated both in new crops, such as pineapples and palm oil, and traditional crops, such as coffee and bananas. Costa Rica is a highly competitive and leading exporter of pineapples, with over 50% share of the world market (COMEX, 2016). Moreover, the agricultural sector benefits from a strong government commitment to poverty reduction, agriculture and rural development, and from the provision of a range of general services for agriculture, including extension services, research and development (R&D), and plant and animal health services. Lastly, Costa Rica’s enduring record of environmental protection has enabled it to reduce its vulnerability to natural hazards. While the emphasis on environmental protection has involved some short-term trade-offs – notably in the form of increased pressure on land availability – it has also provided longer-term benefits for the sector, including potential new opportunities for higher-value “green” marketing.

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