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.
Costa Rica should increase agricultural productivity and take new steps to promote competitiveness to ensure that the farm sector continues to contribute to sustainable and inclusive growth, according to a new OECD report.