This Review of Agricultural Policies: Costa Rica is one of a series of reviews of national agricultural policies undertaken by the OECD’s Committee for Agriculture. The Committee for Agriculture is one of the OECD technical committees mandated by the OECD Council to carry out an accession review of Costa Rica.

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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.

This Review, undertaken in close co-operation with the Costa Rican Executive Secretariat for Agricultural Sector Planning (SEPSA) and other institutions of the Agricultural Public Sector (APS), assesses the performance of the agricultural sector in Costa Rica over the last two decades, evaluates the country’s agricultural policy reforms, and provides recommendations to address future challenges faced by the sector. The evaluation is based on the OECD Committee for Agriculture’s approach that agricultural policy should be evidence-based and carefully designed and implemented to support productivity, competitiveness and sustainability, while avoiding unnecessary distortions to production decisions and to trade. The Review also includes a special chapter highlighting recent advancements and key challenges related to the adaptive capacity of agriculture to climate change.

This chapter examines the key characteristics of the agricultural sector in Costa Rica. It includes a brief overview of the political, economic, social, and geographical factors that constitute the broad context for the development of the agricultural sector. The sector’s role in the economy is outlined, including structural change over the last two decades, farm structure and producer characteristics and trends in agricultural productivity. The chapter concludes by examining trade flows in the agricultural sector, as well as the structure of upstream and downstream sectors and marketing chains at national level.

This chapter reviews the framework, key policy objectives and institutional arrangements for agricultural policy in Costa Rica. It provides an overview of relevant policy developments since the 1980s, after which it describes domestic agriculture-related policies, followed by an examination of trade policies relating to the agro-food sector. The subsequent section estimates support provided to agriculture and the cost that these policies impose on consumers and taxpayers. The main conclusions of the chapter are summarised in the final section.

The long-term productivity of Costa Rica’s agricultural sector is at serious risk from climate change. Increasingly severe floods and droughts, rising temperatures and heightened exposure to pests all threaten to compromise the sustainability of its productivity growth in the coming decades. This chapter assesses efforts by the Costa Rican government to encourage farmers to adapt to climate change. Adaptation is key to minimising the negative effects and taking advantage of new opportunities in a changing climate. The government has already taken a number of important steps to support farmer efforts to adapt. This chapter highlights progress made, and discusses opportunities to take this further through four key dimensions of adaptation policy: (i) strategic prioritisation of adaptation objectives, (ii) information generation and dissemination, (iii) rule-based regulation, and (iv) financial incentives.