An Analysis On The Competitiveness Of Costa Rica’s Coffee Trade

Coffee production has played a key role in Costa Rica’s history and continues to be important to the country’s economy. In2011, the agriculture sector employed28percent of the labor force and comprised10percent of Costa Rica’s total GNP.Coffee is an important commodity and a popular beverage. Over1.6billion cups of coffee are consumed in the world every day. Over90%of coffee production is done by small producers in small developing countries like Costa Rica, while consumption happens mainly in the industrialized economies.Agricultural producers, particularly those with smaller, independently owned operations, face a critical issue:how to compete effectively in today’s marketplace.Some key problems countries face when competing in markets characterized by parity of core product attributes are:Traditional differentiation strategies are eliminated from the countries’ arsenal.They are based in rural areas in poor countries where infrastructure is poor and service provision low.Local purchasing markets are often characterized by imperfect competition, where the appearance of cartels is common in small producing countries like Costa Rica.Due to lack of investment in Research and Development of new varieties of disease resistant coffee, during the last2cropping season Costa Rica has faced a decrease in production that has weakened a lot of the producers.To face this problems Costa Rica most implement strategic changes in its current agricultural strategy, this dissertation intends to determine which those strategic areas are.