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NO To Fixing Rice Prices In Costa Rica

Costa Rica needs about 20,062 tons of rice caught per month and has a consumption of 49.82 kgs per person per year, according to Conarroz figures. Photo Édgar Chinchilla, La Nacion

Q COSTA RICA – The Comisión para la Promoción de la Competencia (Coprocom) – Commission for the Promotion of Competition) – is opposed to the fixing of grain prices, the only commodity in the country whose price is established by decree

Although Corporación Arrocera Nacional (Conarroz) continues to insist on the negative effect of freeing up the price of rice, Coprocom is maintaining its stance against the measure, arguing that it has not served to increase the volume produced or improve the productivity of the rice sector.

Nacion.com reports, “…In a statement of April 20, the Commission reiterated to the Ministry of Economy Industry and Commerce (MEIC) the position it has maintained since 1998, as regards the inconvenience of maintaining the fixing of rice prices … in addition, it pronounced itself against the setting of minimum prices to the consumer, a measure that has been applied since 2013 and which, according to Coprocom, harms consumers in acquiring an essential product in the Costa Rican basket.”

The Coprocom is an agency of the MEIC, but its role is totally independent.

The measure, fixing prices by decree, has been questioned by some countries of the World Trade Organization (WTO),  an intergovernmental organization which regulates international trade, as it is described as a subsidy or transfer of resources from the consumer to the producer.

Rice is the product most demanded in Costa Rica. Some 20,062 tons are required per month and has a consumption of 49.82 kilos per person per year, according to Conarroz figures.

The government of Costa Rica, by Executive Decree, set the producer price and the minimum and maximum consumer price for different presentations (packaging) and qualities of milled rice, either locally produced or imported.

The decree also sets the price for all the available rice qualities in the market. For instance, it sets the price for
milled rice packaged in 46 kg bags for a rice qualities of 80/20 (80 percent whole grain and 20 percent broken grain) and lower. It also sets the price per kg for those qualities of rice, and does the same for other rice qualities such as 90/10 all the way to 99/1.

The decree further limits market competition by indicating: “it is considered contrary to price regulation, any commercial practice which tries to change the intentions of the legislator in this matter; some of these practices are: attaching of additional products, raffles, promotions, offers or similar practices; the above because the regulation has the goal of strengthening the proper functioning of the rice market, searching for a balance between the producer, the consumer, and the millers, according to article 50 of the Political Constitution”.