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Investments in Agriculture
Tropical Export Crops, Fish and Shrimp Farming, Small-scale and Hobby Farming
The Costa Rican economy is heavily dependent upon agricultural exports. Traditional exports that continue in high production are coffee and bananas. Since the 1990s there has been a considerable boom in exports of pineapple, melons, mangos, citrus, root crops such as yuca (cassava), and other tropical products.
Coffee
Costa Rica is a producer of high quality, "mountain grown" Arabic coffee. About 60% of the crop is marketed at premium prices as specialty coffee. However, the international price of coffee beans has been depressed for many years, primarily by the large supply of inferior beans from Brazil and Vietnam. While the price has recovered somewhat in the last two years, the cost of coffee land has also greatly increased, such that coffee production of not a particularly good investment. Organic coffee production is increasing in Costa Rica and commands a superior price. An investment budget and expense and income accounts for organic coffee is available on request from Dale at troporg@racsa.co.cr
Bananas
This traditional export is monopolized by a handful of multinational giants, Chiquita, Dole, and Del Monte. The multinationals have huge plantations on the Caribbean coast and they contract production with independent producers, who receive prices that are quite low. The monoculture requires large applications of pesticides and banana companies are criticized for environmental pollution and oppressive labor conditions. Costa Rica is a high cost producer compared to Ecuador and Colombia and the European Union imposes a high import duty on fruit produced in Latin America, in favor of Europe's former colonies. This is not an activity that I could recommend to anyone to get involved in, except possibly in plantains or organic bananas of disease resistant varieties. There is a producers cooperative of organic growers near Puerto Viejo on the Atlantic coast. There is also a coop of cacao producers in the region, but that crop suffers from serious disease problems.
Pineapple
Costa Rica is now the world's leading producer of pineapple. The climate and soils of the north are perfect for pineapple. Since 2000 the international demand for the fruit has exploded and prices have risen and remained relatively stable. While Del Monte and Dole are huge producers they do not command the oligopolistic production and marketing control they enjoy in bananas. There is a proliferation of pineapple plantations managed by independent small, medium, and large-scale producers, some of whom contract their production at fair prices to the multinationals. Larger producers often market their own production in Europe or the United States. Pineapple is a very profitable and low risk business. However, the entry cost is high, land prices are up, investments in plant and equipment is substantial, and initial planting and operating expenses are high (around $12,000 per hectare). We recommend that an investor interested in this crop work out a partnership agreement with an experienced pineapple grower, especially if the investor is not well grounded in agriculture. There is an organic grower looking for a partner to help capitalize a fairly large project. Production of organic pineapple anywhere in the world is well below market demand and premium prices are likely to continue into the future. We have extensive documentation on growing and marketing pineapple, as well as direct growing experience. Email Dale at troporg@racsa.co.cr for crop budgets, a Business Plan and other information.
Other Export Crops
We recently conducted a lot of research on dairy farming. This industry here is organized into producers' cooperatives so that dairy farmers receive production contracts at good prices. The price of milk has gone up and, along with other food staples, is expected to stay at reasonable to good levels. Investment requirements and expense and income data for dairy are available on request to troporg@racsa.co.cr
Another good business with bright prospects is juice oranges. The major producers of frozen concentrate are having problems, Florida with weather and Brazil with orchard diseases. Costa Rican product is filling some of the export demand and receiving good prices. An investor can contract oranges to a local juice processor. The disadvantage is that an orchard requires four years before reaching the harvest stage and funds are tied up in planting and maintenance costs. Fresh limes are also a good export crop and could be done on a smaller scale if arrangements with exporters are made to ship limes in containers of pineapple, mangos, or melons.
The Institute for Agrarian Development and a private processing company have a program to plant 3000 hectares of passion fruit and to process and export the fruit juice. The fruit grows well in the Northern Zone, land is available, and contract growers are needed.
Costa Rica is also an important exporter of ornamental plants, ferns, and flowers. While this is a very competitive business there are some existing plant farms on the market that are profitable operations and it is possible to begin a business under contract with a plant grower's cooperative.
Crop budgets and other information on citrus and ornamental plants are available, as are some documents on tomatoes, rice, and hot peppers. troporg@racsa.co.cr
Sustainability
Our staff is commited to sustainable and organic agriculture. Large-scale, monocultural export agriculture is not sustainable. We do work with small and medium-size growers of food crops. We subscribe to the principles promoted by Food First, see www.foodfirst.org
To view a worthy organic project in Costa Rica consult www.Kopalicommunities.com
Aguaculture
With the depletion of supplies from ocean fisheries, fish and shrimp farming have become successful businesses. In Costa Rica there is a proliferation of small-scale tilapia production and there is one company that exports huge quantities of fresh tilapia filets by air freight, mostly to Miami for distribution throughout the U.S. This operation is described at www.rainforestagua.com With its abundance of warm, clean water, Costa Rica is ideal for tilapia farming and there is ample space for both local and export marketing. Trout are also farmed utilizing the cold water of the higher mountains. For information of fish farming see www.noe-aguaculture.com (consultants, site has many links), www.fis.com (Fish Information Service), or www.aguaculture.com and www.tilapia.com
While tilapia and trout can be farmed with high livability and without significant risk, shrimp are more delicate creatures. Nevertheless, the production record of shrimp farms using brackish water from Nicoya Bay is quite satisfactory. We have large and small shrimp farms available as turn key operations. While obtaining permits to utilize water for fish farming are not difficult to obtain, new shrimp farms permits in tidal estuaries may not be so easy.
For accounting data and Business Plans for tilapia and shrimp, email troporg@racsa.co.cr
Small Scale and Hobby Farming
Costa Rica has many, many beautiful properties to build your own home in nature to enjoy gardening or to engage in some kind of farm activity for self-consumption or local markets. Depending upon altitude and mini-climate one can grow a great variety of fruits and vegetables year around, as well as have livestock. We have helped a number of people locate a coffee farm, for example, and we have on our staff an agronomist, Jorge Ulate, who can help in managing coffee or most any type of farm product. Jorge and Dale Johnson can give good advice on organic farming practices. To view hobby farms click here: Small farms in Costa Rica.
For investments in other sectors such as tourism, conservation or residential development - please view our page on: Business Opportunities in Costa Rica. Or click here to return to the Costa Rica Investments index.