5.2.1.- Costa Rica

Costa Rica has always had strong focus on the European market and therefore good commercial relations with importers have been established. Costa Rica is still regarded as a ‘pleasant’ country to do business with but a difficult country to get established due to, amongst others, the existing bureaucracy and state monopolies.  
Costa Rica is world wide known for its strong environmental image. The agricultural sector has never really taken full advantage of this image in a proactive way by pushing an environmental Costa Rican brand controlled by the public and the private sector. Individual initiatives however, do take advantage of the fact that produce comes from Costa Rica.
Taking all Costa Rican preconditions into consideration, the country shows great potential to put more focus on niche markets and to create added value to its produce. Such developments can be based on a strategy benefiting from the countries international image.
Costa Rican producers could put much more emphasis on the added value they can give to their produce. A proactive attitude from governmental institutions, sector organizations and private enterprises to communicate and assure Costa Rican quality is required. The need for such a system is becoming urgent now that exporters (for instance melon growers) have faced severe problems with residue on their fruits entering the European market. Based on various interviews and trends detected in the market, a joint approach to avoid similar problems which have a negative effect on all Costa Rican agriculture produce will be necessary. It will be a sector obligation to join efforts and to start selling the strong image and communicate that the sector complies with international requirements.

5.2.1.1.- Vegetable production for the local / regional market

Actual situation
As described in the previous chapter, there is a clear opportunity for Costa Rica to use its strengths and most of all, its world wide positive image, for agricultural purposes. The vegetable sector is a clear example of a sector which does not produce according to standards which are obligatory in Europe and, to a lesser extent, the USA. The main reason for this is that most growers produce for the local market which is not very demanding.

Future scenario
Supermarkets have not yet started playing a similar role as supermarkets in Europe. Focus on the fresh segment is not as strong and therefore, vegetables with residues of crop protection products still occur. Traceability, uniformity of produce and packaging is hardly an issue in the local market. However, Wall Mart has taken over a number of supermarkets in Costa Rica opening doors for new developments such as a complete new approach of the fresh segment in the supermarkets. The large number of foreign tourists and foreign residents are another reason to improve the fresh segment in the supermarket. There is a clear demand and a lack of supply. On top of that, quality produce like vegetables and fruits would put much more emphasis on Costa Rica’s world wide ecological image. 
In order to fulfil these demands, growers will have to change their production methods drastically. Greenhouses should be constructed to create controllable environments in which quality crops can be produced. This assumption could create various opportunities for Dutch suppliers (greenhouses, cultivation equipment, seeds) as well as Dutch crop specialists. The perfect scenario would be to have a Dutch grower setting up a strategic alliance with a local company having greenhouses which can be used for vegetable production. Such a company could be supported by Dutch supply companies (seed companies, equipment, biological control, equipment, substrates) to set up an example in the Costa Rican / Central American market.

5.2.1.2.- Flowers bouquets for the North America market

Actual Situation
The exports of Costa Rican flowers are heavily depending on just a few producers of Lilly and some companies exporting a wider range of flowers, partly being used for mixed bouquets. This last issue can become very interesting for Costa Rica due to the fact that knowledge, a wide range of products, greenhouses and logistics are required to develop such an industry. The only country in Central America where such preconditions can be met is Costa Rica.

Future scenario
To produce bouquets of flowers, there are basically two options. First of all, existing companies can, together with European or American support, develop into producers of mixed bouquets. What is lacking for existing companies to do so is capital and / or knowledge.
The second option is to set up a cooperative of small local growers of various crops having joint packaging, cooling and export facilities. Quality and uniformity of produce and access to investment capital will be key issues to make such a system work. The lack of actual collaboration between local companies and the limited strategic and financial support from public entities makes such a scenario less likely.
Competition in this market can predominantly be found in Colombia and to a lesser extent in Ecuador. Other Latin American countries do not produce finished bouquets for the North American market because of the lack of the required above described preconditions. Costa Rica is close to Miami which might even open doors for transport with sea freight to the USA.
To make the first option work, Dutch investment or knowledge transfer, it is necessary to have a much more intense exchange of knowledge and (market) information between companies in Costa Rica and the Netherlands. Central American Business meetings, sector studies, exhibitions like the Hortifair and a more proactive approach towards the implementation of such opportunities from  the private and the public sector can interest new potential investors.
The second option is based on the assumption that local growers, supported by the local entities, will define a strategy to make optimal use of all strengths available in the country. It can be recommended to check if international funds can be found to support such an initiative.

5.2.1.3.- Fair Trade melons for the European market

Actual Situation
Europe is developing its market for Fair Trade produce. It all started with coffee. Later on, bananas became part of the product range. In recent years, other fruits like pineapple, mango and even flowers were added. For the Costa Rican melon sector, it is a necessity to focus on niche markets or to reduce costs drastically. Added value using the strengths of Costa Rica as a country seems the most feasible path. Cost reduction will only create limited and temporary solutions. Mechanization is hardly possible except for packing and grading processes.

Future scenario
Recent demand in the European market indicates that demand for socially responsible fruits is not just limited to bananas. There is an increasing demand for other fruits like melons and pineapples. On a Central American level, Costa Rica shows the best preconditions to enter such niche markets. On the other hand, options are limited. Conventional production taking into consideration increasing cost prices, shows little future perspectives.  Alliances with importers to implement Fair Trade production could not only create new markets but could also have a catalyzing effect on the Costa Rican melon sector. Local producers should take the initiative to look actively for alliances with Dutch importers / investors or maybe even seed suppliers.