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Country profile - Costa Rica

costa rica

Costa Rica is a stable long-standing democracy and middle-income country, which has developed far faster than its neighbours in Central America. But in contrast to its steadily improving environmental and biodiversity management and high levels of public spending on health and education, one-fifth of its population remain poor. To address this, the government has made a long term commitment to improving the agricultural sector.

Overview

The relatively low share of agriculture in GDP (nine per cent) and employment (15 per cent) compared to many developing nations is attributable to limited arable land endowment, reforestation, declining government support to smallholder farmers and strong growth in the services (especially tourism) and industry sectors. The main staple food crops grown are white maize, rice, beans, tomatoes, potatoes, yuca, and onions.

While substantial areas of pasture have been switched to growing pineapples, rice and sugar cane over the last decade, the accompanying decline in cattle population has been compensated by increased productivity. Despite the decline in large-scale cattle ranching, smallholders remain active in livestock, raising pigs, goats and poultry. Exports of beef products account for about 1.5 per cent of total agricultural exports, growing only slightly in volume in recent years.

Leading export crops are bananas and pineapples (© IFAD/Carlos Salazar)
Leading export crops are bananas and pineapples
© IFAD/Carlos Salazar

Agriculture's share of total exports is quite considerable, at 37 per cent for January to October 2010, involving 870 different products. Leading export crops are bananas and pineapples, with multinationals such as Delmonte, Dole, Standard Fruit, and Chiquita the dominant players. The European Union and United States account for over 90 per cent of these sales. The third major export crop is coffee. Together these three account for nearly half of agricultural export earnings in 2010, with palm oil, melons, sugar cane and ornamental plants accounting for another ten per cent.

Despite prolonged and continuing civil society criticism and some court proceedings against large-scale banana and pineapple producers due to highly negative environmental impacts on surrounding land areas and water supplies, the producers' associations for bananas and pineapples, CORBANA and CANAPEP, both insist that environmental and social standards have steadily risen in their plantations and are now fully compliant with the law. A recently launched CORBANA-UNEP project on Good Agricultural Practices in the banana sector is planned to generate further advances, including the elimination of pesticide infiltration into the Caribbean Sea. A government Action Plan to eliminate stable fly infestation was also launched in 2010.

Entirely in the hands of very small producers, coffee production has declined in recent years due to very low world prices in the early 2000s, followed by subsequent escalating fertiliser costs due to oil price increases, several extreme weather events, plant diseases and urban expansion pressures. This led to the exit of over 25,000 farmers by 2010, one-third of the total number in 2000. An ambitious government-supported replanting programme, using traditional and improved varieties is currently underway. Although world prices have improved, concern is growing at the impact of climate change on the future viability of the sector.

Costa Rica is home to nearly 6% of the world's biodiversity (© Rainforest Alliance)
Costa Rica is home to nearly 6% of the world's biodiversity
© Rainforest Alliance

Home to nearly six per cent of the world's biodiversity, some 26 per cent of Costa Rica's territory is allocated to protected forests, national parks and nature reserves. A year-round temperate climate combines with a broad variety of landscapes, tropical and sub-tropical, a string of spectacular volcanoes in its central highlands, as well as scenic Pacific and Caribbean coasts to make it a leading eco-tourism destination.

Rapid deforestation in the 1950s to make way for agriculture and cattle ranching turned Costa Rica into one of the most deforested countries in the world. A radical change of direction began in the 1980s when World Bank structural adjustment policies reduced the profitability of such operations in marginal forest lands. The subsequent introduction of conservation areas, extensive reforestation and improved forest management policies were accompanied by the creation of both public and private sector bodies, which have worked collaboratively to replant large areas. Forests now cover over 2.4 million hectares, just under half the total land area.

Government commitments

The 1994 commitment by President José Maria Figueres to turn Costa Rica into a model for sustainable development has remained an enduring, though unevenly implemented, goal of successive governments. The country is also aiming to become carbon neutral by 2021. Assuming office in May 2010, President Laura Chinchilla called for a new long-term state policy for agriculture and the food industry. Enhancing economic and export performance, and improving environmental standards, including mitigation of and adaptation to climate change are just two of the outlined aims.

A government-supported coffee replanting programme is currently underway (© FAO/Giuseppe Bizzarri)
A government-supported coffee replanting programme is currently underway
© FAO/Giuseppe Bizzarri

Built around the three 'pillars' of competitiveness, innovation and technical development, and management of rural areas, President Chinchilla's new policy will continue to support the 2008 national food plan with assistance from the UN's Food and Agriculture Organization (FAO), in response to declining nutritional standards of low-income families and low production of key staple food crops, which are being supplanted by cheaper imports. The policy also mainstreams regional commitments by Costa Rica under the Central American Agricultural Policy, the Regional Agro-environmental and Health Policy, and the Central American Strategy for Territorial Rural Development. Also reflected are progressive trade liberalisation measures to be implemented as part of the recently concluded Central American free trade agreements with the US and EU.

How far the new policy might improve the situation for farmers and the rural poor cannot yet be gauged. The Chamber for Agriculture and Food Processing (Camara Nacional de Agricultura y Agroindustria) has raised pointed questions on how the policy would be financed while the national farmers' union (UPANACIONAL) insists that substantial rural development can only be achieved by an integrated set of measures covering all economic activities, including agriculture, agro-tourism and food processing. The Ministry of Agriculture and Livestock is now reviewing comments from two rounds of nationwide stakeholder consultations, aiming to announce the definitive policy later this year.

Statistical information
  • Country: Costa Rica
  • Capital: San Jose
  • Area: 51,100 sq km
  • Population: 4,516,220 (July 2010 est.)
  • Population growth rate: 1.3% (2010 est.)
  • Life expectancy: 78 (2010 est.)
  • Ethnic groups: white (including mestizo) 94%, black 3%, Amerindian 1%, Chinese 1%, other 1%
  • Languages: Spanish (official), English
  • Inflation: 5.8% (2010 est.)
  • GDP purchasing power parity: US$51.3 billion (2010 est.)
  • GDP per capita: US$11,400 (2010 est.)
  • GDP composition by sector: agriculture: 6%; industry: 23%; services: 71% (2010 est.)
  • Land use: arable land: 4%; permanent crops: 6%; other: 90% (2005)
  • Major industries: food processing, medical equipment, textiles and clothing, construction materials, fertilizer, plastic products
  • Agricultural products: bananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef, poultry, dairy; timber
  • Natural resources: hydropower
  • Export commodities: bananas, pineapples, coffee, melons, ornamental plants, sugar; beef; seafood; electronic components, medical equipment
  • Export partners: US 32.61%, Netherlands 12.82%, China 11.81%, Mexico 4.2% (2009)

Written by: Vanya Walker-Leigh

Date published: March 2011

 

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