organic agriculture in costa rica: the case of the talamanca small farmers association

8/14/2019 Organic agriculture in Costa Rica: the case of the Talamanca Small Farmers Association

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Table of Contents

I. IntroductionII. The Importance of Organic Production: The Case of APPTA

A. Organic Agricultural Production in Costa RicaB. The Organic Production of Cacao and Bananas in Talamanca

III. Effects of the Organic Model on Small Farmers and the Environment in TalamancaA. Effects on the Incomes and the Quality of the Lives of FarmersB. Effects on the Natural Environment

IV. Factors in the Success of Cacao and Banana ProducersA. The Influence of Economic and Agricultural PoliciesB. The Role of Policies Favouring Organic AgricultureC. Organic Agriculture and the Programmes of Universities and Training InstitutionsD. The Views and Policies of Agricultural Research, Extension and Credit AgenciesE. The Role of NGOsF. The Role of APPTA

V. Conclusions and Potential Lessons

A. ConclusionsB. Potential Lessons

References

Map 1: Talamanca county, Costa Rica

Annex: List of Persons Interviewed

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Acronyms

APPTA Talamanca Small Farmers AssociationCNP National Production CouncilEU European UnionINA National Training Institute

NGO Non-Governmental Organization

NOAP National Organic Agriculture Programme

PITTA National Programme of Agricultural Research and Technology Transfer

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I. INTRODUCTION

1. This report focuses on the recent growth of organic agricultural production in Costa Rica, one ofthe countries that has advanced the most in Latin America in developing institutions to deal withorganic agriculture. The National Organic Agriculture Programme (NOAP) within the Ministry ofAgriculture and Livestock was established in 1994; an Organic Agriculture Law was passed byCongress in 1996 and several other laws have been approved since the mid-nineties. In addition,Costa Rica has also been successful in implementing policies to preserve its diverse ecosystems, andit has been making efforts to promote environmentally friendly economic activities among smallfarmers, such as ecotourism and organic agriculture. These measures have contributed to the creationof a good international image that has been favourable for the access of Costa Rican organic productson foreign markets.

2. The study provides an overview of the development of organic agriculture in Costa Rica andanalyses in detail the case of the Talamanca Small Farmers Association (APPTA), a well-knownsuccess story in Costa Rica because it has become the largest association of organic small producersin the country and one of the largest in Central America. APPTA includes 1 500 small farmers, most

of them Bribri and Cabcar indigenous people who live and produce in an indigenous reservation inTalamanca county (province of Limn) in the south-east of the country (see Map 1). These farmershad been growing cacao since the forties. When a disease (moniliasis) caused by Moniliophtoraroreri sp. decimated the crops in the late seventies, the farmers were left without their only source ofcash income. As a result, the farmers abandoned their cacao plantations and many slashed and burnedthe cacao-growing areas in order to cultivate subsistence crops (corn, beans and rice) or guinea. Bythe early nineties, they were living mainly on subsistence crops and poultry, selling a very low

proportion of their production on the market.

3. APPTA was successful in promoting a revival of cacao production. With the help of the ANAIAssociation, a non-governmental organization (NGO) of US origin that has been working withindigenous communities in Talamanca since the early eighties, APPTA established contacts with

buyers of organic cacao in the United States and, in the early nineties, was able to certify a significantarea of cacao and to start exporting to the US. After this initial success, APPTA carried out efforts tosell other products (especially bananas) that were being grown by its members under the rain forestand often mixed with cacao, but which were used for household consumption. As a result of theseundertakings, APPTA obtained organic certification for the production by its members of bananas,and it started selling bananas to foreign firms based in Costa Rica that were using bananas to produce

baby food (organic puree of bananas), which they were exporting to Europe and the United States. By2000, more than 1 000 APPTA members had obtained certification as organic producers of more than2 000 ha of cacao and bananas. APPTA was exporting cacao directly to Europe and the United Statesand was selling organic bananas for the production of baby food. In addition, it negotiated with asupermarket chain in San Jos, the capital of Costa Rica, to sell organic fruits and vegetables andstarted a programme to promote these products. The programme came to involve an increasing

number of APPTA members. Finally, APPTA initiated efforts with government agencies to produceorganic bananas to be sold fresh on the international market.

4. Organic production in Talamanca had significant positive effects on the incomes and the qualityof the lives of farmers. This is important because Talamanca is one of the poorest regions in CostaRica, showing the lowest literacy rates and lowest incomes in the country. Farmers had lost accesseven to the limited domestic market for cacao because middlemen had stopped purchasing cacao frommost communities in Talamanca due to their low output levels. As a result of the emergence andexpansion of organic production, farmers were able to start selling cacao again, and they obtained

prices for the cacao that were significantly higher than the prices on the conventional market. Inaddition, while the prices the banana-processing industry paid to APPTA producers for their organic

products were low compared to the international market price for fresh organic bananas, farmers wereable to obtain a constant source of income by selling every two or three weeks all year round.

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Map 1: Talamanca county, Costa Rica

5. In addition, the organic models of production had positive effects on the environment. This isimportant because Talamanca is one of the ecologically richest and most diverse regions in CostaRica. Organic cacao and bananas were environmentally friendly because they were not grown as amonoculture, but under the shade of rain-forest trees and combined with other products, such as fruitsand tubers, in an improved form of the traditional systems of production. According to several studiescarried out by specialists, these organic systems of production characteristic of Talamanca were also

associated with the conservation of wildlife.

6. The paper discusses the factors that led to the success of organic production in Talamanca,analysing the role of laws, regulations and agencies dealing with organic agriculture, the main

problems that small producers faced when growing organic crops, the ways in which they solvedthese problems and the role of government institutions, private agencies, APPTA and NGOs. Themain questions addressed in the paper are the following:

(a) What were the positive and negative effects of organic production on the production and incomesof small farmers?

(b) What were the main constraints that small farmers faced when they started to grow and sell

organic crops?

(c) What were the main interventions that government agencies and NGOs implemented to help smallfarmers successfully cultivate organic crops?

7. The findings presented here are based on fieldwork carried out in Costa Rica between 14 and 28August 2001. During that time, interviews were conducted in Alajuela, Cartago and San Jos withgovernment officials, researchers and professors at the University of Costa Rica, and professionals atinternational organizations, government agencies and NGOs. In addition, producers of organic cropswere visited in the counties of Talamanca, where the production of organic bananas and cacao isconcentrated, and Alajuela, where most of the fresh organic vegetables are produced. The author was

joined on the visits to Talamanca by Michelle Deugd of the Free University of Amsterdams Centre ofRural Development Studies located in San Jos who focused on a microeconomic analysis of organic

production and elaborated a paper that provided valuable information for this study.

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8. The report is organized as follows. The second section describes organic agricultural productionin Costa Rica and the case of the APPTA. The third section examines the forces that led to theemergence of organic products in Costa Rica and the influence of various factors, includingmacroeconomic and agricultural policies, the role of government and private institutions involved inagricultural research, extension and training, and the influence of NGOs. The fourth section looks atthe key interventions that led to the successful production of organic bananas and cacao in Talamanca.The last section offers conclusions and some preliminary lessons for project design.

II. THE IMPORTANCE OF ORGANIC PRODUCTION: THE CASE OF APPTA

A. Organic Agricultural Production in Costa Rica

9. The cultivation of organic crops in Costa Rica started in the mid-eighties. Interestingly, itoriginated not as a result of a specific programme or project of government agencies or non-governmental organizations (NGOs), but as a result of the initiative of farmer associations andindividual farmers growing different crops in various regions of the country in response to critical

situations that they faced because of crop pests and diseases or the excessive use of pesticides. Theseinitiatives involved small cacao producers in the Atlantic region (Talamanca, province of Limn)whose crops had been decimated by a disease, small coffee producers in the Central and Northernregions (provinces of Alajuela and Guanacaste) who were experiencing financial problems due to thehigh costs of the intensive use of pesticides and vegetable producers in the Central region (province ofAlajuela) who were facing high costs and health problems linked to the use of chemical inputs. Whilethese experiences were unrelated, they had in common the experimentation of farmers with organicfertilizers and pesticides and, for some crops, notably, cacao and coffee, the use of natural forests forthe cultivation of some crops.

10. Simultaneously, a dynamic and diverse organic movement appeared in the late eighties. Thismovement included NGOs and individuals, mostly urban professionals working at universities and

with NGOs, who were concerned about the negative impacts of conventional agriculture on thenatural environment and the possible negative effects of chemical residues on the health ofconsumers. Although this organic movement did not have an influence in the emergence of organicagriculture in Costa Rica, it played a key role in the development of an institutional and legalframework for organic agriculture beginning in the mid-nineties. It encouraged useful studies on thesituation of organic agriculture in Costa Rica, and its work contributed to the adoption of organicagriculture by other producers.

11. Finally, a research project funded by the Japanese International Cooperation Agency in the lateeighties and implemented through the University of Costa Rica and the National Training Institute(INA) also played a very important part in the emergence of organic agriculture. The Fabio BaudritExperimental Station, a University of Costa Rica research station located in Alajuela, was carrying

out research on vegetable-production technologies, and some researchers were interested indeveloping organic inputs as an alternative to chemical inputs. The INA, a government agency createdin 1960 to provide training to small farmers and workers in all economic activities, was also interestedin incorporating new topics to its agricultural training programmes. The project sponsored by theJapanese International Cooperation Agency involved Japanese researchers and volunteer professionalswho analysed and eventually promoted the use of organic fertilizers (bocashi) in place of chemicalfertilizers among vegetable producers in the Central region. Its results were significant, leading to anincreasing interest among university researchers and NGOs and encouraging other vegetable

producers (both small farmers and firms) to shift to organic production.

12. By early 2001, the estimated area under organic production in Costa Rica was around 7 000 ha,about 1.6% of the countrys total cultivated area (449 000 ha, see Table 1). About half of this area had

been formally certified as organic, while the rest was in transition and might obtain at least part of it formal certification in the next one to three years. Bananas and cacao were the most important

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certified crops, with close to 2 300 ha (64% of the certified organic area). Other important certifiedcrops were coffee (860 ha), blackberries (730 ha) and vegetables (43 ha).1 Organic vegetables andcrops that had not yet been certified (basic grains, roots and spices) were sold mainly on the domesticmarket, while the certified crops were produced for export.

Table 1: Estimated areas under organic production, by crop, 2001

Organic Area (ha) Total Area (ha)Bananas a/ 2 265 50 000Cacao a/ 2 200Bananas 679 49 394Coffee 860 106 000Oranges 550 25 200Blackberries 730 n/aVegetables 43 26 650Beans 1 398 35 550Cashews 182 N/ASugar cane 128 46 000

Pineapples 33 9 900Spices b/ 30 n/aMango 7 9 270Other crops c/ 197 53 809Total 7 102 448 973Source: IICA (2001) and Executive Secretariat, Agricultural Sector Planning.a/ Includes the total certified areas of the Talamanca Small Farmers Association (APPTA) in Talamanca. Thiscomprises several production systems in which cacao and bananas are grown under the rain forest and combinedwith other species. The main production systems are cacao + forest, bananas + forest, cacao + bananas + forest,and cacao + bananas + fruits + forest.

b/ Includes vanilla, cinnamon, cardamom, ginger, curcuma, peppermint lemon grass and wild marjoram.c/ Includes mainly palm, guinea, cassava and corn. The total area column also includes cashew, blackberriesand spices.

13. Organic bananas and cacao were produced in Talamanca county (province of Limn), whileorganic vegetables were concentrated in the province of Alajuela, and organic coffee was grownmainly in the provinces of Alajuela and Guanacaste. All of the production of organic cacao and

blackberries and most of the coffee were exported to the European Union (EU) and the United States(Table 2). Most of the banana production was sold processed as baby food to Europe and the US,while a small fraction was sold fresh in a supermarket chain in San Jos, the capital.

Table 2: Exports of organic products (t per year)

Volume Market

Coffee* 11 020 US

Bananas 20 400 EUBlackberries 964 USOranges 6 136 EUSpices 1.4 USSugar cane 630 EUCacao 300 EU, USPineapples 264 USMedicinal plants N/a EU, USSource: Based on information in IICA (2001).* In quintals (one quintal = approximately 45.5 kg).

1 The areas under organic production are estimated in IICA (2001).

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Poultry 2.2 7.2Total 100.0 100.0Source: APPTA.

23. A study by Deugd (2001) has evaluated the microeconomic performance of the productionsystems predominant among members of APPTA and has found that organic cacao and bananas havemade a significant contribution to their incomes. The production system that includes cacao, bananas,fruits and trees has generated a family income which is 60% higher than the income the familymembers would have obtained through similar work in the same location (USD 11.60 per daycompared to USD 7.27 per day). The results are satisfactory even if the family-labour costs (which arenot paid) are incorporated into the overall costs. A separate evaluation of a production system thatincludes bananas, mixed with other fruits and trees, shows an even better performance, with anincome for family labour of USD 14.90 per day. The production system that includes cacao as a maincrop, mixed with rain-forest products and fruits, generates USD 5.50 per day. Although the economic

performance of this last system is slightly negative if family-labour costs are taken into account, it isimportant to recall that small farmers themselves often do not consider family labour as a cost. Thenet income without regard to family-labour costs was USD 264 per ha per year, an important

supplement to the family income, especially for households with members who do not have access toother job opportunities.

24. Finally, while there is no specific information on the effects of organic agriculture on health, theorganic-production systems that farmers applied in Talamanca prevented the expansion of cropswhich might have relied intensively on chemical inputs. The use of chemical inputs is substantial notonly in Talamanca, but in Costa Rica as a whole. Recent studies have shown that Costa Rica has oneof the highest levels of pesticide consumption in the world (about 4 kg per person annually).5 Morethan 1 400 cases of intoxication caused by pesticides were reported in 1998, one third of themaffecting minors. Cases of cancer, the origin of which is often related to the use of synthetic

pesticides, are also high among the Costa Rican population.6 In Talamanca, much of the lowlandsconsist of important areas where bananas are grown by transnational corporations, which use a

technological package characterized by the intensive use of pesticides, fungicides and fertilizers. Inaddition, there has been a significant increase in the area where guinea is grown as a single cropthrough conventional technologies.

B. Effects on the Natural Environment

25. The effects of the production systems associated with organic production in Talamanca are veryimportant because the region is one of the most biodiverse in Costa Rica and has one of the largestforested areas in Central America. Several authors have estimated that Talamanca has more than10 000 species of superior plants, which represent more than 90% of the assets of Costa Rica, morethan 4 000 species of inferior plants and close to 1 000 types of ferns of the 1 300 existing in CostaRica.7

26. The Government has established reservations and protected areas, and Talamanca has beensubstantially transformed by the expansion of agriculture. Guinea and cacao have traditionally beenthe main cash crops. After cacao was affected by moniliasis, many farmers, especially in thelowlands, slashed the cacao crops and started to grow guinea instead. Meanwhile, most farmers in thehighlands abandoned the crop and turned to subsistence crops. By 1992, the forest occupied 33% ofthe land, guinea 18%, cacao 12%, basic grains 7%, bananas 5% and sugar cane 1%.8 The pressures forfurther expansion of the areas under agriculture have been significant because of the high populationdensity that characterizes Talamanca. A large proportion of the population is indigenous and shows

5 See Programa Nacional de Agricultura Orgnica (1999), page 9.6 See Programa Nacional de Agricultura Orgnica (1999), page 9.

7 Tsochok (1992), cited by Borge and Castillo (1997).8 Geography Department of the University of Costa Rica, Comisin para la Defensa de los Derechos Indgenas deTalamanca and Royal Embassy of Denmark (1994).

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some of the most serious levels of poverty in Costa Rica. In addition, an important share of the bananaplantations that are grown in Costa Rica by transnational corporations is concentrated in Talamanca.These banana crops are monoculture systems characterized by a very high use of pesticides and otherchemical inputs, and they have represented one of the most important dangers to the conservation ofthe ecological diversity of Talamanca. Finally, government agencies the National ProductionCouncil (CNP) and the extension services of the Ministry of Agriculture and Livestock haverecently been providing technical assistance and subsidies for investment in the cultivation of guineain Talamanca as a part of a government programme to promote non-traditional crops. Guinea hasusually been cultivated as a single crop in areas once occupied by rain forest and involves asubstantial use of chemical inputs.

27. Several authors who have studied the production systems dominant among APPTA farmers havefound that these systems had positive effects on the natural environment compared with other

production systems. Due to the thick ground cover that is typical of organic production systems,which combine cacao and bananas with fruits and tubers under the rain forest, the degree of erosionand leaching is considered minimal compared to monoculture-production systems. In addition, all

product residues are used for home consumption, and the residues of the cacao are reintegrated into

the system (Deugd, 2001).

28. Some studies have found that, although the agroforestry systems characteristic of farmers inTalamanca were not as ecologically diverse as the natural forests, they were much more diverse thanfields with single crops. Guiracocha (2000) has found that, while the natural forests in Talamancahave 85 species of trees and palms, the shaded cacao fields have about 35 species, while the shaded

banana fields have 14 species, and the single banana or guinea have none. The number of animalspecies in the natural forests is 51, while it is 25 in shaded cacao, and 9 in shaded banana. Nosubstantial differences are found in the number of mammals in the three systems. Parrish et al. (1999)have also found no significant differences between the number of species of birds in the shaded cacaofields of Talamanca (131 species) and in the natural forest (130 species). A large number of thesespecies (44 in the natural forest and 34 in shaded cacao) are protected under the Convention on

International Trade in Endangered Species of Wild Fauna and Flora, or were endangered according toclassifications of the World Conservation Union.9 Analysing the production systems of APPTAfarmers in Talamanca, Parrish et al. (1999) conclude that the management of shaded cacao leads to alower incidence of pests and disease and a higher level of natural reproduction as a direct result of thegreater ecological diversity.

29. While most authors have found the effects on the natural environment to be positive, it has alsobeen argued that the crops sold on the market, especially bananas, may involve a net loss of nutrientsif a high loss of biomass is not offset by the incorporation of nutrients. Comparing nutrient outputthrough crop harvesting and nutrient input through material pruned from trees, Deugd (2001) hasconcluded that the extraction of nitrogen, phosphorus and magnesium has been more or less offset.However, the potassium balance was negative, with a loss of about 47 kg per year. Judged on the

basis of data on the soil in the research area (Umaa, 2001), the average level of potassium was justwithin the normal range, so that annual potassium losses may have a negative long-term effect on thesustainability of the organic banana system. This would mean that management practices shouldrequire the use of some organic fertilizers.

IV. FACTORS IN THE SUCCESS OF CACAO AND BANANA PRODUCERS

A. The Influence of Economic and Agricultural Policies

30. The Government implemented economic and agricultural policies that had positive effects onorganic production even though they were not specifically targeted on organic production. These

policies involved structural reforms, especially in the financial sector and in international and

9 See Parrish et al. (1999), pages 24-25.

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domestic trade policies. The financial-sector reforms included the reduction of subsidies for creditschemes, the liberalization of interest rates and the authorization for intermediate financial institutionsto establish passive and active interest rates. In 1995, a new law on the modernization of financialinstitutions reduced the role of the Central Bank. The main impacts of these reforms on theagricultural sector were related to the contraction of the formal financial sector and of the creditavailable for the agricultural sector, the sharp increase in interest rates and the fresh difficulties faced

by small farmers in gaining access to credit. Meanwhile, a substantial number of new non-governmental financial institutions emerged. The reforms in trade policy were tied to the fact thatCosta Rica had joined the World Trade Organization, signed a free trade agreement with Mexico,liberalized imports of machinery, equipment and vehicles and implemented fiscal incentives forexports.

31. These policies partly explain the favourable growth of the Costa Rican economy during thenineties. The average annual growth rate of the gross domestic product reached 5.8% between 1991and 1999, while the growth of the gross agricultural product reached 4.1% annually over the same

period. Total exports grew almost fivefold between 1991 and 1999 (from USD 1.4 billion to6.6 billion), while agricultural exports almost doubled (from USD 1.0 billion to 1.9 billion) over the

same period. Non-traditional agricultural exports increased from 23.5% of agricultural exports in1991 to 39.8% in 1999.

32. The Government also implemented trade and agricultural policy reforms during the nineties thatreduced dramatically the support to traditional crops (mainly corn and beans) and promoted theirreplacement by non-traditional crops. Until the late eighties, the Government had intervened activelyin the market for basic grains as a part of a food policy that aimed at ensuring the domestic supply atreasonable prices. The CNP had purchased basic grains from farmers, stored them in its own facilitiesand imported them if domestic production did not satisfy domestic demand. In addition, theGovernment had established high tariffs on imported grains, while setting consumer and producer

prices.

33. As a part of trade reform, the Government reduced dramatically this role in the domestic marketfor basic grains, lifting price controls and transferring storage facilities to farmer associations. Thetariffs for basic grains were reduced, and other trade barriers were lifted. In addition, the Governmentimplemented programmes to promote expansion in non-traditional crops by providing subsidies forinvestment in farmer associations and for credit for the creation by farmers of new plantations. Themission of the CNP was changed so that it promoted non-traditional crops and agro-processing andwas responsible for the administration of government subsidies to projects involving non-traditionalcrops. As a result of these policies, the area under cultivation with basic grains fell substantially, and,at the same time, many small farmer associations all over Costa Rica undertook a wide variety ofinitiatives involving non-traditional crops, including the cultivation of fruits and vegetables, organiccrops and agrotourism.

B. The Role of Policies Favouring Organic Agriculture

34. Costa Rica is one of the Latin American countries that has advanced the most in developinginstitutions to deal with organic agriculture. The main policy instruments were created in the mid-nineties, including a set of laws and a National Organic Agriculture Programme (NOAP).

1. Laws and regulations

35. The main laws dealing with organic agriculture in Costa Rica are the Organic Environment Law(No. 7554), approved in November 1995, and the Organic Agriculture Decree, approved by theMinistry of Agriculture and Livestock in 1997. In addition, several other laws have been approved to

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regulate various issues related to organic agriculture, such as the registration of producers of organicinputs, soil conservation and the use of poultry manure.10

36. (a) The Organic Environment Law, an umbrella law, has been important in terms of thedefinitions it contains on certain relevant issues:

(i) It provides a definition of organic agriculture.

(ii) It designated the Ministry of Agriculture and Livestock as the government agency in charge of thedesign and implementation of policies concerning organic agriculture, the establishment of norms and

procedures, the supervision over certification agencies and the promotion of research and thedissemination of organic technologies.11

(iii) It established the requirement that organic products must be certified by a national orinternational certification agency legally registered in Costa Rica, and it defined the minimum period(three years) for the transition from conventional to organic agriculture.12

(iv) It created the National Ecological Agriculture Commission to assist the Ministry of Agricultureand Livestock in matters related to organic agriculture. The commission is composed of arepresentative of the Ministry of Agriculture and Livestock, a representative of the state universitieswho has experience in the dissemination of organic technologies, three representatives oforganizations involved in organic products, a representative of a firm or organization which isimplementing programmes or projects to promote organic agriculture and a representative ofregistered organic certification agencies.13

37. (b) The Organic Agriculture Decree (No. 25834), approved in February 1997, created a detailedregulatory framework for the production, processing and marketing of organic products. The mostimportant measures, which were expanded in 2000, though they were not changed in substance,involve the following:

(i) Detailed definitions of the nature of organic agricultural products, including a prohibition on theuse of terms that could lead to consumer confusion.

(ii) The designation of the Ministry of Agriculture and Livestock, through the NOAP, as thegovernment organization in charge of supervising the application of regulations and of promotingorganic agriculture. In addition, the Ministry of Agriculture and Livestock was made responsible forthe establishment of norms for the production, processing, packing, conservation, certification,inspection and marketing of organic products.14

(iii) The creation of detailed norms for the production, processing, marketing, labelling, packing andcontrol of organic products, including the use of organically grown seeds, the implementation of farm

management plans to provide adequate protection for crops, the implementation of water-conservationplan for irrigated crops, the application of soil-conservation measures and the imposition of aminimum three-year period of the application of the procedures for organic production before theoutput of a producer could be labelled organic.

(iv) The establishment of the requirement to register all products labelled organic with the Ministry ofAgriculture and Livestock, which determines if the products meet the quality and technical

10 Decree No. 25538, approved in October 1996, regulates the use of poultry manure. Law No. 7779 on Soil Use,Management and Conservation, approved in May 1998, contains provisions on the use and conservation of soils.11 Law No. 7554, Article 73.12

Law No. 7554, Articles 74 and 75.13 Law No. 7554, Article 76.14 Decree No. 25834, Articles 5 and 7.

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specifications established in the laws and regulations and provides a ministry stamp guaranteeing theproducts as organic.15

(v) The creation of a list of authorized inputs, including fertilizers and products for the control of pestsand disease and for food processing.

38. (c) The Phytosanitary Protection Law (No. 7664), approved in May 1997, established generalregulations on phytosanitary controls. It included specific provisions on organic agriculture. Itdesignated the State Phytosanitary Service of the Ministry of Agriculture and Livestock as the entityresponsible for registering producers and processors of organic vegetables and organic inputs, forassuring compliance with established procedures of organic production, for issuing certificates fororganic products and for authorizing specialized inspectors and certification agencies.16 In addition,the law required the Government to promote organic agriculture by covering the costs of certificationfor up to two years for small farmers who can demonstrate that they cannot afford to pay themselves.

39. (d)Decree No. 26921 was approved by the Ministry of Agriculture and Livestock in May 1998 aspart of the Phytosanitary Protection Law of one year earlier. It established that the State Phytosanitary

Service should oversee compliance with the norms and procedures on organic certification, registercertification agencies, inspectors, farms and companies producing organic inputs. In addition, the lawprovided detailed definitions on the criteria and the procedures for obtaining organic certification andthe registration and operation of certification agencies and inspectors. Among other provisions, itcreated an organic certification committee, which has functions equivalent to those of a certificationagency.

2. The NOAP

40. The NOAP was created in 1994 within the Ministry of Agriculture and Livestock. It was tosupport and promote the development of organic agriculture in Costa Rica. The main instruments thatthe NOAP has used to accomplish this have been the following: (a) the promotion of organic

agriculture among producers and consumers, (b) the dissemination of information, (c) training, (d) theformulation of studies and plans, (e) support for research activities, (f) the promotion of incentives,credit schemes and other support policies and (g) coordination among the various public and privateagencies.17

41. After a slow start, the NOAP became more active starting in the late nineties, coordinatingvarious activities with government and private organizations, mainly the Ministry of Agriculture andLivestock, the CNP, the Ministry of Health, the Ministry of the Economy, Industry and Energy,universities, producer associations, NGOs and international organizations. The programme undertooka diagnosis of organic agriculture in Costa Rica in 1999 and prepared the next year an action planwith the participation of representatives from government agencies, NGOs and producer associations.The action plan proposed alliances between government and private agencies to generate information,

carry out training exercises, research and extension work, improve the laws, regulations andinstitutions dealing with organic agriculture and promote the production, processing and marketing oforganic products.18

3. The effects of the new laws and government organizations on organic agriculture

42. While Costa Rica has made significant progress in developing institutions to deal with organicagriculture, the impact of these institutions on the development of organic crops has not yet beensignificant. The emergence of organic agriculture took place in the late eighties before theseinstitutions had been created starting in the mid-nineties.15 Decree No. 25834, Article 37.16

Decree No. 25834, Article 11.17 See National Organic Agriculture Programme (1999).18 See National Organic Agriculture Programme (2000).

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43. This does not mean that the new institutions are not necessary. Indeed, these institutions havebecome essential in the effort to gain access to export markets because of the new demands ofimporting countries. For example, the EU recently established that countries exporting organic

products to EU members must satisfy minimum standards in terms of the existence of national lawsand institutions to ensure that the production systems and certification processes for organic productsmeet EU requirements. Thus, the development of such institutions is necessary if a country wishes tosell on the export market to the EU. Likewise, countries must now create institutions to ensure thatstandards on animal and plant health are met. Once a country has met the EU requirements, it canobtain EU third-country status and is allowed to export products to the EU that have been certifiedas organic by its own certification agencies. In addition, the existence of laws and institutions meansthat exporters of organic products can rely on a national framework to support them in case of

problems on foreign markets. Until mid-2001, only six countries had obtained EU third-countrystatus. Argentina was the only such country in Latin America. Costa Rica has completed theapplication process and is hopeful that it will obtain third-country status soon.

44. An additional positive effect of the development of national institutions may, in certain

circumstances, be a drop in the cost of certification faced by farmers. In fact, the new laws andregulations require that all certification agencies register and open offices in Costa Rica. Until thenineties, as in other Latin American countries (except Argentina), the certification agencies workingin Costa Rica were European or US firms. Thus, a farmer or group of farmers had to pay additionalcosts because the inspectors traveled from foreign countries. They had to pay expensive air tickets and

professional fees that were similar to the fees these inspectors charged their home producers. Incontrast, nationally based certification agencies had significantly lower travel expenses and could paylower fees to inspectors based in Costa Rica. In some countries (for example, Guatemala), nationalcertification agencies were created, but they still had to enter into partnerships with European or UScertification agencies in order to be respected in importing countries.

45. Unfortunately, according to most of the producers and producer associations interviewed, the

costs of certification seem not to have fallen in Costa Rica. The reasons are likely to be the following:

(a) Buyers in importing countries still prefer that the products they purchase are certified bycertification agencies in their own countries with which they have worked in the past and trust. Forthis reason, the national certification agencies in Costa Rica, as in other countries, must enter into

partnerships with foreign certification agencies in order to satisfy foreign buyers of Costa Ricanproducts. In such partnerships, the national certification agency usually carries out most of the workinvolved in the certification process, but two certifications are issued, one from the local agency, andthe other from the foreign agency. The partnerships represent an extra cost for the local agencies, andthis cost is transferred entirely to producers.

(b) Only one national certification agency (Eco-Lgica) had become legally registered by early 2001,

when another one (Aimcopop) registered and started operations. In addition, several foreigncertification agencies registered and opened offices in San Jos, including the Organic CropImprovement Association (US), BCS KO Garantie (Germany), Ecocert (France-Germany) and Skal.Thus, there seems to be enough business for numerous certification agencies.

46. In any case, it is important that the organic production of cacao and bananas in Talamanca, aswell as other crops that have been cultivated since the late nineties, have emerged as a result of

producers initiatives without the backing of any public policy or institutions aimed specifically atsupporting organic agriculture. Some organizations, mainly NGOs and universities, eventuallysupported farmers in the production and marketing of organic products.

C. Organic Agriculture and the Programmes of Universities and Training Institutions

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47. Universities and training institutions in Costa Rica have been increasingly incorporating organicagriculture in their programmes since the early nineties. Although there are a few programmesfocused specifically on sustainable agriculture, agricultural specialists in Costa Rica especially theyounger ones who were students in the nineties have usually been concerned about and possess agood general knowledge of sustainable agriculture and the technologies of organic production.

48. The most important university and professional training institutions involved in organicagriculture are EARTH, the University of Costa Rica and the INA. EARTH is a private internationaluniversity that established a campus in the province of Limn in 1990. It specializes in education andresearch in the agricultural sciences. It has a bachelors programme in agricultural sciences andnatural resources in which Costa Rican and international students are enrolled. The programmesapproach to agriculture is based on long-term sustainability, and organic agriculture is viewed in thecontext of sustainable models of agricultural production.

49. The University of Costa Rica created an organic agriculture programme in 1995 as a means tocoordinate the teaching and research initiatives in organic agriculture at the university. As part of the

programme, a one-semester course on organic agriculture is offered within the academic programme

leading to a bachelors degree in agricultural sciences. However, the academic programme has notchanged substantially and still focuses on conventional agriculture. The course on organic agricultureis optional, so a relatively small (but growing) number of students has been taking it.

50. The INA has also been carrying out training in organic agriculture. The INA, a governmentagency created in 1960, provides training to workers in all areas of economic activity and is wellknown in Costa Rica for being very effective. It is quite well funded, receiving the revenues obtainedfrom a tax paid by firms with more than ten permanent employees and calculated at 1.5% of wages.The INA organizes its efforts through seven regional offices and twelve technology centres, whichfocus on different sectors and activities, such as agriculture, food processing, metallurgy, services andtourism. One of these technology centres (the Agriculture Technology Centre) covers areas such assoils and water, agricultural machinery, rural management, animal production, vegetable production

and organic agriculture.

51. The INA started to provide training in organic agriculture to small farmers in 1994 and created theSpecialized Centre on Organic Agriculture in 1997, as part of its Agricultural Technology Centre, to

provide training and carry out research in organic agriculture. The Specialized Centre in OrganicAgriculture is located in Cartago, has an annual budget of CRC 45 million (approximatelyUSD 136 000) and employs eight professionals who carry out both training and research activities.The training courses provided by the INA are usually short term and benefited around 1 200 smallfarmers between 1998 and 2000.

D. The Views and Policies of Agricultural Research, Extension and Credit Agencies

1. Agricultural research

52. Research on organic agriculture in Costa Rica started in the late eighties with a project that wasfunded by the Japanese International Cooperation Agency and implemented jointly by the Universityof Costa Rica and the INA. This project studied the use of organic fertilizers (bocashi) as an input inthe production of organic vegetables in the Central region of Costa Rican. The project involved the

participation of Japanese researchers and volunteer professionals, and it was based at the FabioBaudrit Experimental Station located in Alajuela. As a result of the project, several farmers and firms,as well as researchers at the University of Costa Rica, became interested in organic methods of

production, and the INA started to incorporate organic agriculture in its training courses. In addition,the project was instrumental in promoting the adoption of organic fertilizers by many farmers andfirms producing vegetables in the Central region.

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53. By the mid-nineties, several institutions had started research projects on subjects related toorganic agriculture. Costa Rica has a highly fragmented agricultural research system, whichcomprises a large number of organizations, including the following: (a) producer associationsinvolved in several crops, including coffee, sugar and bananas, such as the National CoffeeAssociation and others which have created research institutes to support efforts to improve theirrespective crops, (b) several universities, such as the University of Costa Rica and the University ofHeredia, which carry out research through their agricultural or technology faculties and (c)government organizations, such as the Ministry of Agriculture and Livestock and the Ministry ofScience and Technology. Universities have been the most advanced in organic research. There has

been substantially less organic research by producer associations and government institutions.

54. As in professional training, the most active university institutions have been EARTH and theUniversity of Costa Rica. EARTH has been carrying out research on its own campus, mostly onorganic pesticides and fertilizers. By 2001, the University of Costa Rica had about 20 researchers whowere involved in research and educational activities in organic agriculture and who were part of theuniversitys organic agriculture programme. There were 15 research projects, mostly in thedevelopment of new pesticides and fertilizers, which were being carried out at the campus in San Jos

and at the Fabio Baudrit Experimental Station. One of the projects focused on the organic bananaproduction systems in Talamanca and was being implemented in collaboration with APPTA. Itsobjective was to analyse alternative management practices in the organic production of bananas thatwere to be sold fresh. The project determined that the typical systems for the organic production of

bananas among members of APPTA in Talamanca may extract a higher amount of nutrients from thesoil than they put into it, indicating that they may not be sustainable over the long term. Thus, the

project was attempting to identify materials and practices to incorporate inputs in the soil, especiallypotassium.

55. Finally, the INA has also been implementing research activities in organic agriculture, includingresearch to determine the proper dosage of organic fertilizers, the development of new methods to

process plants for medical use and the development of organic pesticides.

56. In spite of this progress, much more research in organic agriculture has been due to the initiativeof individual researchers rather than to more or less structured research programmes that may haveresulted from the identification of organic agriculture as a priority by institutions. There is still a greatvacuum in the knowledge in several areas, including the definition of the best dosages for the variousorganic inputs under different soil and climate conditions in the country, the development oftechnologies to control several pests and diseases, the development of post-harvest technologies andthe incorporation of microeconomic analysis in organic research.

57. In addition, there has been little coordination or exchanges of information among institutions andprofessionals involved in research on organic technologies. This is partly due to the characteristics ofthe agricultural research system in Costa Rica, which has tended to function without much

coordination, thereby encouraging the duplication of efforts and competition for resources. In the lateeighties, the Government undertook efforts to create a coordinating body. This eventually led to thecreation of the National Commission of Agricultural Research and Technology Transfer in 1989.

58. The commission initially included 15 research organizations it later incorporated several others and established mechanisms to enhance coordination and collaboration. It was given a fourfoldmandate: (a) to advise government ministers on issues related to policies in agricultural research andthe transfer of technologies, (b) to establish national programmes in accordance with government

policy, (c) to manage, monitor and evaluate relevant national programmes and (d) to establish anational agricultural information system. As one of its first tasks, the commission organized national

programmes on commodities and factors of production, the National Programmes of AgriculturalResearch and Technology Transfer (PITTAs), to plan and coordinate activities among allorganizations working on a specific commodity or factor of production (for example, corn and water).

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Each PITTA had a technical committee on which all the organizations interested in a specificcommodity, as well as key researchers in the field, were represented.19

59. Each national programme elected its own coordinator. The commission then requested themanagement of each programme to prepare a diagnostic study based on an analysis of the strengths,weaknesses, opportunities and threats (a so-called SWOT analysis) of the new PITTA and its targetcommodity or factor of production. The SWOT analysis included an evaluation of the resourcesavailable for research on that commodity in each of the different organizations involved, as well as

production and market opportunities. In addition, the Foundation for the Promotion of AgriculturalResearch and Technology Transfer was established in 1996 with a mandate to promote, support andfinance projects in the country related to research, training and diffusion in agricultural technologies.The foundation started with seed capital of about USD 100 000 and was allowed to plan, discuss and

promote donor projects. Eighteen PITTA programmes were initially established for products such asavocados, bananas, beans, beef cattle, citrus fruits, corn, milk, potatoes, tomatoes and irrigation. Oneof the programmes focused on organic farming.

60. After a slow start, the PITTA on organic farming began making progress under the influence of

the NOAP. The NOAP realized that the formulation of a research programme on organic agriculturerequired the participation of all the institutions involved in agricultural research, and it identifiedcertain guidelines for the approach that research activities should take, including the need to besystemic, practical and open to aspects other than production, such as the markets for organic

products, economic studies and the processing of organic products. In addition, it argued that farmersshould be involved in the research on organic agriculture and that research should take into accounttechnologies already developed by farmers.

2. Agricultural extension

61. Unlike the situation in other Central American countries, which have completely suspended theprovision of public extension services to farmers, Costa Ricas Ministry of Agriculture and Livestock

has been providing extension services through its regional and local offices located throughout thecountry. However, these extension services have suffered substantial budget cuts that have reducedthe number of extension workers and the availability of vehicles and equipment.

62. The Ministry of Agriculture and Livestock has been working more closely with the CNP since themid-nineties. The CNP was created in the sixties to implement a food-security policy based onensuring the supply of basic grains to the countrys population at low prices. The agency intervenedactively in the market for basic grains, buying crops from farmers, setting producer and consumer

prices, managing storage facilities and importing grain when domestic production did not cover theneeds of the population. In the early nineties, the Government implemented important policy reforms,which included the liberalization of the market for basic grains. As a result, the purpose of the CNPunderwent a serious change. It stopped buying the output of farmers and implementing price controls,

and it transferred its storage facilities to farmer associations. In addition, it began promotingdiversification in agriculture, especially among small farmers, through the introduction of new crops,mainly for export.

63. In carrying out its new mission, the CNP worked jointly with the extension services of theMinistry of Agriculture and Livestock. The CNP had funds to support producers in farmerassociations who were willing to switch to new crops. These funds allowed the CNP to providesubsidized credit to small farmers so that they could produce perennial crops and to give grants tofarmer associations to cover part of the costs of storage facilities, trucks, or other collectiveinvestments. The process to accomplish this involved the submission of an application by a farmerassociation and the formulation of a project jointly by the CNPs project formulation unit and thesectoral projects unit of the Ministry of Agriculture and Livestock. Once a project had been evaluated

19 See Hobbs et al. (1998).

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and approved, the CNP worked with the extension services of the Ministry of Agriculture andLivestock to provide technical assistance for project implementation.

64. In the case of Talamanca, the CNP and the extension services of the Ministry of Agriculture andLivestock have concentrated their efforts on promoting the diversification of agriculture through thecultivation of guinea for export. The CNP promoted the creation in Talamanca of the Guinea NationalCouncil, an organization representing, before the public and private sectors, the interests of guinea

producers, as this county accounts for close to 80% of the national production of guinea. In addition,it developed and implemented, jointly with the extension services of the Ministry of Agriculture andLivestock, two projects to support small farmer associations. One involved Asoparaiso, an associationof small farmers located in the lowlands, and the other the Guinea National Council. Started in 1997,the project with Asoparaiso aimed at promoting the cultivation of 1 000 ha of guinea for export. Itinvolved the construction of processing facilities, the purchase of a truck to transport the product andconstruction of an association building for Asoparaiso. The total cost of the project wasCRC 23 million (around USD 69 400), 40% of which was given as a grant and 60% as a five-yearloan, with a grace period of one year and a 19% real interest rate. As a result, Asoparaiso has beenable to sign contracts with Dole and Del Monte, which export the guinea to Europe and the US. The

project with the Guinea National Council, which started in 2001, involves the provision of long-termcredit to farmers who introduce guinea, on condition that they sign contracts with the transnationalbanana corporations. The objective was to increase the areas under guinea cultivation to 2 000 ha.

65. The CNP has only recently started to pay some attention to organic production. It has formulateda project, jointly with the Ministry of Agriculture and Livestock, to support farmer associations(APPTA, the Ucanehu Association, the Association of Organic Peasant Producers and the BordenAssociation of Conservationist and Organic Agriculture) in the production and marketing of organic

bananas to be sold fresh on foreign markets. In addition, it has approved the execution of a feasibilitystudy for a processing plant for these same farmer associations that would produce banana puree forexport. These initiatives do not involve any substantial change in CNPs policies or any specificsupport for organic agriculture. The agency simply views the organic crops in Talamanca as one more

alternative in the diversification of market opportunities. As one of the CNP technicians in the Bribrioffices has said, CNP does not have any preference for organic or conventional agriculture. Itsupports any production alternative that involves the diversification of production among smallfarmers, has good market prospects and shows that it is feasible at project appraisal.

66. Part of the Huetar Atlantic region and located in Cahuita, Margarita and Sixaola, the offices inTalamanca of the extension services of the Ministry of Agriculture and Livestock have workedtogether with the CNP, concentrating all their human and material resources on assisting farmers whoare growing guinea. Although organic crops in Talamanca have become relevant since the earlynineties, the extension services of the Ministry of Agriculture and Livestock have never focused onany farmers involved in organic production. In addition, the agencys extension workers have not hadany training in organic agriculture, so they have not been able to offer organic farmers a service of

acceptable quality.

3. Agricultural credit

67. The introduction of new crops and technologies by small farmers frequently requires credit so thatthe farmers can cover new investments or the higher costs of inputs. It was thus important to discoverif the farmers growing organic crops in Talamanca needed credit, and, if they did, how they wereobtaining it.

68. As many other countries have done, Costa Rica created banks to provide long-term and short-termagricultural credit to farmers. Credit lines have often been tied to flexible conditions because theyhave responded to larger development-policy goals. Financial reform in the nineties liberalizedinterest rates and led to a sharp decrease in the availability of credit for small farmers from the formal

banking system. At the same time, a great number of new financial institutions, including savings and

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credit cooperatives, foundations and community banks, emerged to serve the rural population,frequently with support from NGOs. These financial institutions became very important sources ofcredit for small farmers, and they have managed important rural credit portfolios. As a result, accessto credit has not been such an important problem for small farmers in Costa Rica relative to farmers inother Central American countries.20 These institutions have been even more flexible than banks in theconditions they impose on credit, including interest rates and collateral.

69. Most organic producers in Talamanca had no access to credit from formal banking institutions orother institutions. However, this did not generally represent a problem in the organic production ofcacao and bananas because these did not require any significant investment. The organic productionsystems in Talamanca involved merely the certification and some improvements in the managementof production systems that were already traditional in the region, which consisted in the (abandoned)cultivation of cacao mixed within the rain forest. Although the introduction of bananas required someexpenditure for the purchase of plantines, the cost of these was so low that often it could be coveredthrough the savings of the farmers.

70. While most production activities are carried out through family labour, some of the new activities,

such as the cleaning of fields and keeping cacao plants free of moniliasis, required additional labour.Thus, farmers needed to have some non-family labour available. This problem affected especiallywomen farmers, who were sometimes single and did not have the resources to hire wage labour. Atraditional solution used by indigenous farmers was the chichera, whereby work was paid in kind withfood and chicha, a traditional alcoholic beverage obtained by the fermentation of corn. However, thechichera system was still expensive because of the cost of the food and chicha. Thus, short-term creditfor small farmers, especially for women, to pay for wage labour represented the most important creditneed in the organic cultivation of the crops characteristic of Talamanca.

71. The existence of credit was key for APPTA in allowing it to purchase the output of its members.APPTA had undertaken a big effort to organize the production of organic crops and establish a systemto monitor its members to assure that they complied with the proper procedures for applying organic

technologies. If APPTA had not had funds available to pay farmers for their cacao and bananas whenthe farmers sent their output to the association or very shortly thereafter, other buyers could havestarted buying up the production and left the association without any product. In order to avoid this

problem, the US buyers of the cacao provided APPTA with seed capital so that the association couldcreate a fund to pay farmers immediately after they have sent their product, instead of waiting untilthe association receives its payments from the export operations. The existence of these funds was akey in allowing APPTA to maintain its position in the market for cacao and bananas.

E. The Role of NGOs

72. NGOs have had a very important role in the development of organic agriculture. The mostimportant have been the following:

(a) The ANAI Association is an NGO of US origin that started working in Talamanca in the mid-eighties to promote reafforestation activities among indigenous communities. ANAI was key in thecreation of APPTA. It encouraged farmers to establish the association in order to serve their collectiveinterests and attract foreign donors engaged in the implementation of projects that tended to preservethe rich environment of Talamanca. Later on, it helped APPTA take the first steps as an organizationand establish contacts with foreign buyers of organic cacao.

(b) Fundacin Gilomb is an NGO that, like ANAI, has supported indigenous communities inTalamanca since the mid-eighties. Its emphasis has been the promotion of organic agriculture,especially the cultivation of organic bananas and sugar cane by small farmer organizations. Fundacin

20 See Barrantes et al. (1997).

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Gilomb has provided these farmer associations with training and technical assistance in negotiatingcontracts with buyers of organic products.

(c) The Education Corporation for Costa Rican Development, which was created in 1984 and hasworked on organic agriculture among small farmers, provides training to small farmers and promotesthe marketing of organic products. It has been organizing fairs every week or two in San Jos since1999 at which small farmers sell their organic vegetables. In addition, it has carried out useful studieson the problems of organic agriculture in Costa Rica, organized workshops to promote discussionamong institutions on the challenges of organic agriculture and participated in discussions on thedevelopment of a legal framework for organic agriculture.

(d) The National Association of Organic Agriculture comprises more than 160 small to large organicproducers. It was created in 1992 to encourage organic agriculture, mainly through training and thepromotion of certification as an instrument to gain access to markets. The association participatedactively in the creation of the first Costa Rican organic certification agency, and it has been providingtraining in the certification process to professionals who wish to work as inspectors. In addition, it hasalso participated actively in the development of Costa Rican legislation on organic agriculture.

F. The Role of APPTA

73. APPTA has been very important in the growth of organic agriculture in Talamanca and in helpingsmall farmers gain access to organic markets. APPTA was created in 1987 as a result of efforts of theANAI Association. ANAI had been working since the mid-eighties with indigenous communities inTalamanca to expand reafforestation and the introduction of new species of trees in harmony with theexisting forests. ANAI promoted the creation of APPTA with the idea that it could help attractinternational donors who supported indigenous communities in developing countries and that it couldassist in the collective marketing of products. The first collective tasks undertaken by APPTAincluded the construction and opening of an input supply store, which is still in operation. In addition,APPTA began working with environmental organizations and NGOs to further rain-forest

conservation. Soon afterwards, it received support from the Inter-American Foundation, a USfoundation that receives funds from the US Congress to implement poverty-reduction projects inLatin America, for the construction of buildings and the purchase of equipment.

74. APPTA is not the only farmer association producing organic crops in Talamanca, but it is themost important in terms of the number of farmers and the volumes sold. Other associations includethe Borden Association of Conservationist and Organic Agriculture, the Association of OrganicPeasant Producers and the Ucanehu Association. These associations involve fewer farmers and

produce only organic bananas.

75. While APPTA was quite successful in attracting international funds to help preserve the rainforest in a region containing indigenous communities, several members were arguing by the late

eighties that it needed to change its focus so as to embrace more sustainable activities. Thediscussions which followed marked the start of a more active role by the organization in the search for

possible markets for the products of members, which eventually led to contacts with buyers of organicproducts. APPTA was important in three ways in the effort to gain access to organic markets for itsmembers:

76. (a) It realized that the possibility existed of certifying as organic the production systems dominantamong the small farmers in Talamanca. In fact, the shift to organic production in Talamanca has notinvolved a substantial change in production practices, in contrast to the situation among producers inother regions, such as the producers of fresh vegetables and coffee in the Central region, wherefarmers shifted from conventional production to organic production. In these cases, the transition wasfrequently costly, and yields fell significantly. In contrast, cacao and banana production was certifiedwithout any substantial change in the technologies of production. This was possible partly because,during its search for market opportunities, APPTA, with the help of ANAI, made contact with buyers

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of cacao in the United States. These buyers were looking for regions in developing countries wherecacao plantations had been abandoned for several years due to pests and disease and were keen toobtain organic certification for these plantations. Thus, APPTA was able to find a market for cropsthat had been abandoned and which were now being produced in such small quantities that they werenot even being harvested.

77. After its success in selling organic cacao, APPTA started to negotiate with firms in Costa Rica tosell organic bananas. Many of the APPTA farmers grew bananas, in addition to cacao. Most of thememployed the Gros Michelvariety, which had been used by transnational corporations on commercial

plantations in Talamanca in the fifties, but which had been abandoned because of the susceptibility tothe Panama disease caused by Fusarium cubensis. After several years of negotiations, APPTA wasable to start selling organic bananas to Trobanex and Gerber, companies of German origin withfacilities in San Jos, which used them as a raw material in the production of organic baby food(puree of bananas) that they exported to Europe and the US.

78. (b) It organized the marketing of organic cacao and bananas. Buyers in foreign countries often donot want to bear the cost of dealing with a large number of individual farmers. They prefer to

negotiate with firms or farmer associations that can deliver the required amounts of product at specifictimes of the year. Thus, APPTA was useful to the buyers of organic cacao, as it was able to organizean efficient marketing system for the purchase of the product from farmers and delivery to the buyersin a timely manner.

79. (c) It created and managed a monitoring system to ensure that all farmers use organictechnologies properly, to prevent individual farmers from using prohibited inputs and to penalizethose who do not comply. This has been the most important task of APPTA. The international normsthat regulate the certification of organic products require groups of small farmers to organize internalcontrol systems. This is a key part of the certification process, along with the annual inspections andthe surprise inspections that are carried out by certification agencies. While these inspections offerpictures of the situation at a particular time, the monitoring systems ensure that organic

technologies are being applied correctly on a day-to-day basis. APPTA has been able to establish anefficient system that is decentralized and involves the participation of members. Indeed, instead ofcreating a central team of technicians who visit farmers regularly, as many farmer associationselsewhere have done, APPTA relied on local village committees that had been established in the mid-eighties to carry out reafforestation activities with the support of foreign donors. When APPTAnegotiated the first contract to sell organic cacao, it committed to developing a monitoring system (orinternal control system) as an element in the certification process. APPTA decided to use the villagecommittees as a basis for the new monitoring system. Each of the 25 new committees has a board, a

president and a treasurer elected by the organic farmers who are members of APPTA in each village.The local committees receive complaints from members about non-complying farmers and decide onthe penalties to be imposed on these individuals. The interviews carried out among members ofAPPTA in the different communities for this study show that the local committees have worked very

well because their purpose is well understood by the communities and their decisions are respected,even when they are strict. In addition, the system works well because APPTA has provided intensivetraining to the communities on the relevance of compliance and the dangers involved for thecommunities if the market is lost because someone has not complied.

V. CONCLUSIONS AND PRELIMINARY LESSONS

A. Conclusions

80. The organic production of cacao and bananas has had great and positive impacts on the incomesand the quality of the lives of small farmers in Talamanca. These farmers lost their main source ofcash income in the late seventies due to an attack of Moniliophtora roreri sp. on their cacao

plantations. As a result, by the early nineties, they were living on subsistence products, mainly corn,beans, rice and poultry. Organic cacao and bananas have now become important sources of cash

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income, and, because bananas are harvested about every two weeks all year round and cacao twice ayear, they have generated a more uniform source of income throughout the year.

81. The organic production systems have also had positive effects on the environment of Talamanca,one of the most diverse ecosystems in Costa Rica and, at the same time, one of the areas most affected

by the expansion of commercial agriculture in rain-forest areas. Organic cacao and bananas areproduced in a production system that is friendly to the rain forest. They are not grown as single crops,but under the rain forest and in conjunction with other fruits and tubers. Thus, they have contributedto the conservation of the rain forest and the related wildlife.

82. APPTA has had a major role in the development of organic production for the following reasons:

(i) It has had the technical capacity to be able to search for new opportunities for its members.APPTA has been able to certify as organic the production systems that its members were alreadyusing and to sell as organic the products that they were already producing, without any significantchange in technology. After its initial success with organic cacao, APPTA was able to negotiatecontracts for the certification and sale of organic bananas, and it negotiated a contract with a

supermarket chain in San Jos to sell organic fruits, vegetables and tubers. In addition, it undertook afeasibility study on the production of organic bananas to be sold fresh on the international market.

(ii) As a farmer association that sells its members products collectively, APPTA has been able toobtain economies of scale in marketing and manage volumes that lower the transactions costs ofnegotiating and implementing contracts with foreign buyers of cacao, as well as with foreign firmslocated in Costa Rica that purchase bananas for the production of organic baby foods.

(iii) It has organized a monitoring system that is effective in ensuring that all members comply withthe organic standards of production, a key requirement in the organic certification process for smallfarmer associations. APPTA has provided intensive training to its members that has been instrumentalin convincing them that it is essential to comply with organic technological standards or everyone

would suffer the negative effects, including the loss of the market. The monitoring system has beeneffective and inexpensive because, to control compliance, it is based on local committees at thecommunity level rather than on the participation of external agents or professionals.

83. The organic production of cacao and bananas in Talamanca has not required any significant on-farm investments because it been based on improvements in the production systems already

predominant among the small farmers. However, the labour needs have been substantial, and it hasoften been necessary to hire wage labour. This represents a constraint on the incorporation of womento organic agriculture, even though the proportion of women in APPTA is high. Women often facegreater difficulties in obtaining the cash to pay for wage labour. The most important investments thatorganic farmers have had to make have been off-farm. They have included collective investments in

packing and storage.

84. Government policies and institutions have generally been supportive of organic agriculture,though they have not had a major part in the emergence of organic cacao and bananas in Talamancaand in the success of APPTA. Economic policies have created a favourable economic environment,characterized by high rates of growth and increasing exports. Trade policies have reduceddramatically the intervention of the state in the marketing of basic grains, and, in addition to

programmes that promoted the cultivation of non-traditional crops, they have encouraged smallfarmers to shift to these crops, including organic crops. In addition, key government organizationsworking in the agricultural sector the CNP and the extension services of the Ministry of Agricultureand Livestock have shifted their emphasis from basic grains to non-traditional crops, though theyhave focused mainly on those crops grown with conventional technologies of production and paidlittle attention to organic crops.

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85. Costa Rica made great progress during the nineties in developing institutions to deal specificallywith organic agriculture. The NOAP was created in 1994, and specific laws and regulationsconcerning various aspects of organic agriculture were approved in the second half of the nineties.These actions were very important in developing the international image of Costa Rica and in meetingnew requirements imposed by the EU on exporters of organic products. These new requirementsinclude the creation of appropriate laws and institutions to deal with organic agriculture so as toensure that organic products are analysed and certified according to EU standards. The steps taken byCosta Rica may make it possible for the country to acquire EU third-country status, which, in theLatin American region, has been acquire only by Argentina and which will become essential if CostaRica is to maintain access to European markets.

86. The development of laws and institutions has had no influence on the production of organic cacaoand bananas in Talamanca, since this emerged several years earlier. However, the laws andinstitutions are important because they provide a support system in case exporters face any problemsin foreign markets. In addition, because the new norms require the existence of nationally basedcertification agencies, certification costs are likely to fall in the future. Such a fall has not yet occurredmainly because of the small number of available certification agencies. The NOAP has also become

important in coordinating the actions of the various institutions involved in organic agriculture.

87. Universities and training institutions for agricultural specialists have been incorporating organicagriculture in their programmes since the mid-nineties, though there is still much room for further

progress. EARTH has a bachelors programme in agricultural sciences that is totally oriented towardssustainable agriculture and explicitly considers the methods used in organic agriculture. TheUniversity of Costa Rica has created an organic agriculture programme that involves all the relevantresearch and teaching activities and faculties. It has also established a one-semester course on organicagriculture as a part of the bachelors programme in agricultural sciences, though this is notcompulsory. In addition, the INA recently created a teaching and research station in Cartago to workexclusively on organic agriculture. As a result of all these efforts, most professionals in agriculturehave a general understanding of organic agriculture and knowledge about some technologies, though

they usually need additional training before they can work on projects that focus on organicagriculture and require more sophisticated knowledge.

88. Several institutions have been carrying out research on organic agriculture since the early nineties.The most important ones have been EARTH, the University of Costa Rica and the INA, which haveall focused on the evaluation and development of organic inputs. The many other organizations thatcomprise the fragmented agricultural research system in Costa Rica have focused on conventionaltechnologies and do not carry out any significant work. In any case, these research activities have notgenerated a significant pool of organic technologies, so the experimentation of farmers has been themost important source of new technologies. The NOAP has been making efforts to coordinate theresearch activities of various agencies through the PITTA on organic agriculture, a body that includesthe various actors involved and defines policies.

B. Potential Lessons

89. The case of organic production in Talamanca shows some potential lessons for IFAD with respectto ways to support the adoption of organic crops by small farmers. The following are the mostimportant lessons:

90. (a) The products of some traditional production systems that are applied by small farmers forexample, production systems for some crops under the rain forest that preserve the rain forest and thewildlife that it contains may be certified as organic with few changes or no change at all in

production practices. These production systems are frequently seen negatively because of the lowproductivity of the crops relative to crops in single-crop production systems. However, they havegreat positive effects in terms of the conservation of the environment, and the organic certification ofthe products may help turn them into more viable alternatives. The effort to obtain organic

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certification should be complemented by efforts to acquire for the small farmers involved the paymentthey deserve for the service they have performed for the environment by relying on these productionsystems.

91. (b) Organic production that involves improvements on traditional production systems has theadvantage of not requiring significant on-farm investments. However, some form of credit should beavailable to contract labour, the most important factor of production for which farmers needed to pay.This credit should be available especially for women, who are more exposed to difficulties in carryingout the labour-intensive tasks usually involved in organic production.

92. (c) Programmes and projects that promote the adoption of organic crops among small farmersshould strongly support farmer organizations and strengthen associations like APPTA. Theseorganizations could be established around a set of tasks that are essential for the success of theinitiative:

(i) The collective marketing of production. Collective action has a major role in creating economies ofscale in marketing, making it possible to obtain better prices and reduce the transaction costs buyers

face when they negotiate contracts.

(ii) The establishment of a monitoring system. The system must be effective in ensuring that allfarmer-members properly apply the organic methods of production.

(iii) The creation of a system based on local participation. While the monitoring system might bemanaged by a specialized technical department within the farmer association, as in the case of manyfarmer associations elsewhere, the experience of APPTA shows that a better alternative may be theestablishment of a system based on local organizations that are effective and substantially cheaper.The organization of such a system would require substantial training during the early stages so thatthe members of the association understand the basics of organic agriculture and the reasons why it isnecessary to comply with the organic standards.

93. (d) The existence of a supportive institutional framework may not be essential in the emergenceand development of organic agriculture. Nonetheless, for many reasons, it is important to promote theestablishment of these institutions if they do not already exist:

(i) New requirements imposed by importing countries (mainly the EU) in terms of the development,in exporting countries, of laws and institutions dealing with organic agriculture have emerged inrecent years. These laws and institutions are intended to ensure that organic products are producedand certified according to the standards of the importing countries.

(ii) Appropriate laws and institutions dealing with organic agriculture can provide protection toexporters of organic products if they encounter any problems in foreign markets. In addition, they are

essential in international negotiations that may be crucial in opening up foreign markets.

(iii) National laws and regulations may make it possible to decrease the certification costs faced byfarmers if they lead to the establishment of nationally based certification agencies. This requiresadditional efforts to promote competition in the supply of certification services.

(iv) The experience of Costa Rica shows that a government programme dealing with organicagriculture may be both inexpensive and effective. Such a programme does not need a significant

budget or numerous staff in order to work well. It requires clear ideas and great coordination amonggovernment agencies and actors in the private sector so that they can pool their efforts and avoidunnecessary duplication.

94. (e) Issues related to organic production must be incorporated in the research and educationprogrammes of universities and training institutions so as to create a supply of professionals who are

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adequately trained and to generate a pool of technologies that can address the main problems faced byfarmers. It is essential to support the establishment of such research and training programmes if theydo not already exist because the insufficient supply of professionals may become a great constraint on

projects that seek to support organic agriculture. To improve research means that institutions mustmove forward quickly in certain areas, including mainly the determination of the proper dosage levelsof various organic inputs under the different conditions of various regions of a country, the analysis ofthe potential negative health effects of some organic inputs (especially pesticides) and economicanalyses of organic technologies and organic production systems.

95. (f) The need for on-farm credit may not be significant in organic production systems with thecharacteristics of those in Talamanca, which have required only some improvements in themanagement of traditional production systems. However, the increased demand for the labour whichcannot be covered by the labour available in families can be addressed by short-term credit schemes.This type of credit will be especially necessary for women producers, who are frequently single andhave fewer resources to pay for wage labour. In addition, associations must secure access to funds forthe purchase of the output of their members.

96. (g) Finally, the costs of certification are an important part of the costs of organic production, andthey might be subsidized during the first few years after the adoption of the organic model ofproduction.

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References

Barrantes, Franklin, Harry Clemens, Ricardo Quers and Martn Ugalde (1997),Estudios de la Ofertay la Demanda de Crdito Rural en Costa Rica: Estudios de Casos en Tres Regiones. San Jos,Costa Rica: Centre of Rural Development Studies, Free University of Amsterdam.

Borge, Carlos and Roberto Castillo (1997), Cultura y Conservacin en la Talamanca Indgena. SanJos, Costa Rica: EUNED.

Deugd, Michelle (2001). Feasibility of Production Systems in Talamanca, Costa Rica. San Jos,Costa Rica: Centre of Rural Development Stu

organic agriculture in costa rica: the case of the talamanca small farmers association

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