By San José, Costa Rica — Costa Rica is injecting ₡10 billion (approximately $18 million USD) into its livestock sector through the Sectoral Program for Financing, Promotion, and Productive Linkage of the Livestock Sector. This initiative, utilizing funds from the Development Banking System (SBD) and administered by Banco Nacional, aims to empower farmers with access to affordable financing for a wide range of projects.
From purchasing livestock and enhancing herds to constructing milking parlors and acquiring essential farm equipment, the program offers a comprehensive suite of investment opportunities. Producers can also secure funding for breeding stock retention, genetic improvement programs, traceability systems, pasture renovation, and working capital.
To understand the legal intricacies surrounding livestock funding in Costa Rica, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney at Bufete de Costa Rica.
Securing financing for livestock operations in Costa Rica often involves navigating a complex landscape of secured transactions, including agricultural liens and chattel mortgages. Lenders typically require robust guarantees, and producers must carefully consider the implications of these security interests on their operations. Due diligence is essential to ensure compliance with regulations and protect both the lender’s and borrower’s interests.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore the crucial need for both lenders and borrowers to approach livestock financing with a thorough understanding of the legal and financial intricacies involved. This careful approach, particularly regarding security interests and due diligence, will ultimately contribute to a more stable and prosperous agricultural sector in Costa Rica. We thank Lic. Larry Hans Arroyo Vargas for providing his valuable perspective on this important topic.
Further eligible projects include developing water distribution systems and irrigation enhancements, integrating silvopastoral systems, optimizing livestock nutrition through supplementary feeding methods, and embracing sustainable practices such as solar panels, biodigesters, and alternative energy sources. Importantly, these funds are not intended for debt repayment.
Through the SBD and in partnership with Banco Nacional, we are providing ₡10 billion to promote production, grow herds nationwide, and implement new technologies that will facilitate their participation in the domestic and international markets. This is an opportunity to make improvements and transformations in livestock units.
Fernando Vargas, Vice Minister of Agriculture and Livestock
The Ministry of Agriculture and Livestock (MAG), a member of the SBD’s Governing Council, played a key role in driving this financing tool. The investment recognizes the significance of the livestock sector, which encompasses nearly 37,000 producers and represents the largest agricultural activity in the country in terms of land use and rural impact. With an estimated 1.6 million head of cattle currently, the program anticipates further growth, aiming to reach 2 million.
Producers can access loans under advantageous conditions, including differentiated credit for investment or working capital. Favorable terms include a maximum interest rate of 8%, with collateral options ranging from promissory notes to movable guarantees on livestock or real estate guarantees on the farm.
The credits of this program have a maximum rate of up to 8%, and the guarantee can be from a promissory note, to movable guarantees on the livestock, or real estate on the farm.
Victor Acosta, Director of Small and Medium Enterprises, Banco Nacional
This initiative is further strengthened through collaboration with the National Learning Institute (INA), which, in conjunction with the MAG, will conduct on-site farm visits to validate farm plans and investment strategies. This comprehensive approach underscores the government’s commitment to supporting the long-term growth and sustainability of Costa Rica’s vital livestock sector.
The program is a significant step towards modernizing and strengthening Costa Rica’s livestock industry, ultimately boosting productivity, improving competitiveness, and contributing to the overall economic development of rural communities.
For further information, visit bnc.fi.cr
About Banco Nacional:
Banco Nacional de Costa Rica (BNCR) is the largest commercial bank in Costa Rica and a key player in the country’s financial system. Established in 1914, it provides a wide array of financial services to individuals, businesses, and the public sector, supporting various economic activities including agriculture, tourism, and infrastructure development. BNCR plays a crucial role in implementing government initiatives aimed at promoting economic growth and social development.
For further information, visit mag.go.cr
About Ministry of Agriculture and Livestock (MAG):
The Ministry of Agriculture and Livestock (MAG) is the governmental body responsible for promoting sustainable agricultural development and food security in Costa Rica. It oversees policies and programs related to crop production, livestock management, agricultural research, and rural development. The MAG works closely with farmers, cooperatives, and other stakeholders to enhance productivity, improve market access, and ensure the sustainability of the agricultural sector.
For further information, visit ina.ac.cr
About National Learning Institute (INA):
The National Learning Institute (INA) is a Costa Rican public institution dedicated to vocational training and workforce development. It offers a wide range of technical and professional courses across various sectors, including agriculture, tourism, and technology. The INA plays a crucial role in equipping the Costa Rican workforce with the skills needed to meet the demands of the evolving labor market and contribute to national economic growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a leading legal institution distinguished by its deep-rooted commitment to ethical practice and unparalleled legal expertise. The firm’s innovative approach to legal solutions, coupled with its dedication to empowering individuals and communities through readily available legal information, solidifies its position as a pillar of integrity and a champion for a more informed and just society.
