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Costa Rica: little giantCountry file
Costa Rica is a unique nation inthe Central America region,
ini-
tially not that different from theneighbouring countries, but it
has
managed to achieve a good living stan-dard for its people during
100 years of democracy. In the ornamental plant industry, this
country of 51,000 km 2 is amajor player in world trade; exports
last
year reached $170.3 million. In the last five years alone the
ornamental exportsfrom Costa Rica grew by more than $28.5million,
well above the size of the entire
yearly plant exports from Brazil ( Figure 1).Recently, a
technical mission of 26
Brazilian growers and businessmen who were in Costa Rica for a
week to see first hand what lies behind this countrys suc-cess
story. The trip was organised by theSebrae agency (Brazilian micro
and smallbusiness support service) and hosted by
Costa Ricanresearcher and con-
sultant GuillermoMurillo, who hasadvised tropical-plant projects
inseveral countries.
If Colombia isfamous for its rosesand cut flowers,Costa Rica
plant production can bedivided into threemain segments:green plants
such asDracaena ,
Aglaonemas andpalms (40% of theexports); foliage with sales of
leaves fromplants like Cordelyne, Aralia and ferns(38%); and
lastly, tropical flowers such as
Alpinias and Heliconias (20%).Characterised by a dynamic private
sec-
tor, export-geared government policies and
The clich that Central America is one of low-incomecountries and
unstable governments has some truth, but there is an exception
called Costa Rica - the worldslargest supplier of ornamental plants
and foliage.
By Mauricio C. Mathias
0
50
100
150
200
M i l l i o n
U S $
2001 2002 2003 2004 2005
136
5
131146 139
7
150141
9 9 12
162 153
170
158
Figure 1. Trade balance plants, flowers and foliage,
2001-2005.
EuropeanUnion49%
NorthAmerica
46%
Asia
3%
Others2%
Figure 2. Exports of plants, flowersand foliage according to
region,
2005.
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Country file
a helping hand from nature, Costa Ricamanaged to develop a
mature and diversi-fied plant industry. According to Procomer data,
214 companies exported plant prod-ucts to 60 destinations worldwide
last year (Figure 2). Keystone to this achievement
was the ability to take advantage of histor-ical circumstances
and opportunities.Exports since 1962
Even though other Central-Americancountries had a head start at
ornamentalproduction, the first major export project in Costa Rica
took place as early as 1962.
A company with US capital, called Matade Costa Rica was set up
in Alajuelaprovince, by an American who worked inthe Miami plant
industry. He startedplanting Dracaena fragrans along the fenceof a
coffee plantation and once he sawhow well they grew he expanded to
D.marginata , D. deremensis, D. sanderiana
(Lucky Bamboo) and Aglaonema spp.( Araceae fam. ).
In time this project became the worldslargest foliage
production, peaking at 130ha in the mid-seventies. In order to
attract more capital, the company went public inthe New York stock
exchange in the 1980s,
which turned out to be a mistake. Its com-petitors bought the
companys shares and
sold them at a lower price, eventually leading to the companys
bankruptcy. Tocomplicate things further, employees hadbeen
multiplying the companys plant material, subsequently selling it to
othersor starting their own production. Theseactions shaped the
character of the early periods of Costa Ricas plant industry, that
of several small companies and many of them with the same
product.
Some historical perspective is necessary,however, to understand
the circumstances
in ornamentals
Costa Ricas plant
production can be divided
into three main segments -
tropical flowers, foliageand green plants.
Help from Mother NatureCosta Rica, situated near the equator
andhaving plenty of sunshine, has a diversity of micro-climates, as
one drives along its
well-paved roads, different landscapesappear. The Atlantic coast
is very warmand rainy, the Pacific side is also hot, but
drier, in between is a central plateau, where most of the
population lives. Thetemperature in the capital, San Jos, at
analtitude of 1,150 m , is between 15 and25
oC. The countries highest peak is the
Chirripo at 3,820 m. The strategic locationhas been another
factor: access to twooceans, without having to cross thePanama
Canal, has helped shipping foliage containers, while with air
transport Miami is only a couple of hours away.
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Country file
in which the Costa Rican plant sector
developed. Back in the 1960s most of Latin American countries
had seriouspolitical problems, with either left-wing movements or
right-wing dictatorships. Inthe 70s there was civil war in
Nicaragua,Honduras and El Salvador. The Americanpresence in the
region was strong when, in1978, the US government decided to
invest in the Costa Rican economy in
order to prevent the regional problemsfrom spreading to the
country. To that purpose, the United States
Agency for International Development (USAID) granted
non-refundable loansthat were used, among other things, to set up
the Costa Rican Investment Board(CINDE), a private non-profit
organisa-
tion, founded in 1982. With aboard of directors made up of major
local businessmen, itsobjective was to diversify theeconomy with
exportablegoods and to attract foreigninvestment. To implement it
inthe mostly banana-and-coffeeagriculture of the time, agro-nomic
research had to look for non-conventional crops withexport
potential. Twenty new crop pro-
grammes were selected; orna-mental plants being only oneof them.
The next step was tobring in foreign experts as
advisors, who under the loanterms had to be preferentially
Americans. It soon becameclear that scientific knowledgeabout
tropical production of ornamentals was scarce, espe-cially under
the local condi-tions. So a reverse decision wastaken; to send
local personneloverseas (using US air compa-nies) for training
courses andtrade shows, while others trav-
elled to Jamaica and Guatemala to learn
from their previous experiences. The real watershed moment in
the sector
however, was the decision to open officesin Costa Ricas main
destination marketsas CINDE set up bureaus in Miami, NY,Canada, the
Netherlands and Japan. In aninnovative move for that time,
theseoffices mission was to supply growers inCosta Rica with market
information,trends and any relevant news that wouldhelp fine-tune
production at home. Theforesight of the concept, that of
market-driven production, became evident asexports grew steadily
using the feedback on customer satisfaction to solve any eventual
problems. At home lower interest rates for agricultural projects
were anincentive for diversification.
In 1979 the government spurred exports with actions such as a
cash rebate program(known as CAT) that ranged from 8 to20% of the
amount exported; tax exemp-tions for rural vehicles, as well as for
pro-duction supplies at exporting farms. Thelatter is the only one
that has remained
until today. CATs were discontinued in1999 as a parallel market
had developedtrading these certificates, plus the govern-ment was
paying back considerableamounts of money to large export firms.
Their discontinuation was a blow to themarket, and those that
had become ineffi-cient relying on the extra incentive didnt
survive, still others had to downsize. Thesuccess of the overall
plan was clear though, working both ends of the chainbrought
remarkable growth for the indus-
Product Total ($) Weight (kg)Statice 816 578Gladiole 1,775
767Gypsophila 2,677 2,218Alstromeria 7,382 3,321Carnation 3,392
13,368Agapanthus 6,270 19,696Others 140,902 85,276Orchid 401,968
30,548Gerbera 446,811 115,822Anthurium 575,823 135,064Pompon
Chrysanthemum 607,575 199,048Strelitzia 653,747 298,875
Calas 807,747 201,292Rose 909,800 244,439Heliconia 987,320
535,872Ginger 1,869,331 1,528,410Bouquets 2,098,102
1,051,853Aster/Dragon/Tipsophita 2,298,081 694,343Chrysanthemum
3,101,616 1,176,588Others 5,050,402 1,803,645Lirium 14,633,217
2,771,005Total 34,676,755 10,912,027Source: Acoflor
Table 1. Flower exports, 2005.
Skilled labour is a competitive advantage; workers have been
with their companies for years and know their jobs well.
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Country file
try in the 1980s.
By 1987 a pact to halt further expansioncame into effect for two
years, to focus onquality. Mandatory cost-accounting as wellas a
foliar-analyses and fertilisation pro-grams were started and
courses were set on farm-auditing. At the time 120 farms
were receiving free consultancy but many didnt apply it in
practice, so when it became a paid service only 30 chose tocontinue
it.
Tropical flowers The flowers and flower buds segment rep-
resented only 20% of all ornamentalsexported by Costa Rica in
2005, or $34.7million. The USA is by far the main buyer
when it comes to flowers, purchasing $31.4million, Europe only
$1.6 million fol-lowed by Canada, with almost $1 million.
Among them tropical flowers (orchids,anthurium, strelitzia,
heliconias and gin-ger) represent a significant
percentage,according to data from Acoflor, the CostaRican
association of flower growers (Table 1).
It is estimated that about 550 ha of tropi-cal flowers are
cultivated in Costa Rica inextensive farms such as Plantas La
Bonita,
a producer and exporter in the Atlantic
zone. The majority of such flowers aregrown in this lowland on
the Atlantic side,
where land is cheap and no irrigation isneeded due to the moist
alisio windscoming from the ocean guaranteeing 4,000mm of rainfall
yearly. So in spite of theregions deep, sandy soils, drainage
ditchesare needed between the shrubs and bushesof a wide assortment
of Alpinias, Heliconias(many H. psitacorum ), Zingiber , Etlingera
,Costus, Musa and Curcuma.
On average these crops demand 1.5 work-er per ha and the pay
rate in Costa Rica is
around $1.10 per hour, in a 48-hour work week. The impact on the
local economy and society of areas where the cultivationof tropical
flowers was established (also inthe Central Valley and North zones)
cannot be overestimated. Since its introduc-tion, a growing number
of women havebeen employed to work, especially in thepack houses,
and sometimes in the field.Having both the man and the woman of
ahousehold employed doubles the family income; plus, women tend to
save a higher percentage of their earnings.
Skilled labour is one of the competitive
advantages of Costa Rica, now with
decades of ornamental tradition; workershave been with their
companies for yearsand know their jobs well. This becomesevident at
La Bonitas pack-house, with apredominantly feminine staff, work
pro-gresses smoothly as the plants arrive fromthe field. Flowers
are checked, washed andsorted out; stems are cut to the samelength,
and the many steps necessary toprepare a bouquet or a box of
flowers arecarefully taken care of, without any appar-ent
supervision.
Moreover, although there are greenhous-
es in Costa Rica, most of the plant pro-duction takes place
under shade houses,or in open fields. While older fields
arereplanted with more productive andtrendier varieties, Costa
Rican farms rely on updated agronomic practices toincrease yield
and quality, rather thanhigh-tech solutions.
More about the other ornamental sectors in Costa Rica,
like green plants and foliage, will be published in our July
issue of Flower Tech.
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