By San José, Costa Rica — The Legislative Assembly of Costa Rica has unanimously approved a significant legislative reform aimed at protecting and empowering the nation’s small and medium-scale sugarcane producers. In its second debate, lawmakers voted to pass File No. 25,647, which modifies Article 17 bis of Law No. 7818, also known as the Organic Law of the Agriculture and Cane Sugar Industry. This structural change updates the financial mechanisms of the Economic Assistance Fund for Producers under the Surplus Regime, ensuring that critical economic relief reaches smallholders when they need it most.
The legislative initiative received strong backing from the Agricultural Affairs Commission of the Legislative Assembly and was heavily championed by key sector organizations, including the Agricultural Industrial Cane League (LAICA), the Federation of Cane Producers Chambers (FEDECAÑA), and the Chamber of Sugar Producers. For Costa Rica’s rural agricultural economy, the reform represents a pivotal shift toward enhancing liquidity and long-term financial security for smaller operations that often face cash-flow volatility during the harvest season.
To better understand the legal and economic implications of the proposed legislative shifts, TicosLand.com reached out to Lic. Larry Hans Arroyo Vargas, a senior legal expert at the prestigious firm Bufete de Costa Rica, to share his professional insights on the developing sugarcane reform.
The proposed sugarcane reform in Costa Rica marks a decisive shift toward balancing the historical protections of small-scale producers with the economic demands of modern trade. By updating the regulatory framework governing relations between independent farmers and industrial mills, the country is addressing long-standing market inequities. Legally, this reform must carefully navigate existing constitutional property rights and international trade commitments to ensure that modernization does not destabilize the agricultural sector but rather strengthens its resilience and compliance with sustainable practices.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, navigating this complex intersection of traditional agricultural protections and contemporary economic pressures will define the next chapter of Costa Rica’s sugarcane industry. Ensuring a legal framework that fosters both competitiveness and equity is essential for sustainable progress, and we are sincerely grateful to Lic. Larry Hans Arroyo Vargas for sharing his invaluable legal perspective on this landmark reform.
Historically, independent sugarcane farmers faced rigid payout structures that delayed financial returns until the absolute end of the harvest cycle. The newly approved reform directly tackles this challenge by introducing two main regulatory adjustments. First, it empowers the Board of Directors of LAICA to authorize provisional payments or financial advances from the Economic Assistance Fund while the harvest is actively underway, rather than waiting for the final agricultural liquidation.
This approval represents a very important step for the sector and, particularly, for small and medium-sized producers. The purpose is for the Fund’s resources to meet their objective more directly and opportunely, providing liquidity during the harvest and ensuring that the remaining money goes directly to the beneficiary producers. We especially thank deputy Osvaldo Artavia, the Commission of Agricultural Affairs, and all the actors who made it possible for this reform to advance by consensus.
Edgar Herrera Echandi, Executive Director of LAICA
The second major pillar of the reform establishes clear guidelines for the distribution of leftover funds. Once the system covers the price difference between quota sugar and surplus sugar, any remaining administrative remnants in the Economic Assistance Fund must be distributed equitably and proportionally among independent small and medium producers. To ensure that these funds are highly targeted to real, small-scale operations, the law places an eligibility cap on producers whose annual deliveries do not exceed 1,500 metric tons of cane.
This reform strengthens the original purpose of the Fund and allows its support to be directed to those who really need it: small and medium-sized independent producers. The limit of up to 1,500 metric tons establishes a clear criterion to target these resources and contribute to the sustainability of this fundamental segment of the sugarcane sector.
Christian Ocampo, Executive Director of FEDECAÑA
This targeted limit ensures that larger industrial conglomerates do not dilute the resources meant for independent family farms. Industry leaders believe that securing these remnants as an established legal right for smallholders will serve as a vital economic safety net. Sugar mills have actively participated in drafting this reform, recognizing that the long-term survival of independent farming families is critical to maintaining a healthy and diversified national agricultural supply chain.
We mills have been part of the construction of this Fund and share the importance of strengthening its original purpose. We support that the remnants be recognized as a right of the small and medium-sized sugarcane producers, so that these resources can remain directed to this segment and constitute an economic backing.
Alejandro Miranda Lines, President of the Chamber of Sugar Producers
The analytical consensus among agricultural economists in Costa Rica is that this reform is a model of proactive sector governance. By matching administrative policy with the cash-flow realities of farming, the legislative change mitigates the financial risks of rising operating costs and market fluctuations. Industry stakeholders have expressed their commitment to working alongside state institutions to ensure the swift, transparent, and effective implementation of the new rules across the country.
This reform allows us to strengthen an existing fund redistribution mechanism generated by the sector and make it more timely for those who need it most within the product structure. For LAICA, FEDECAÑA, and the Chamber of Sugar Producers, it is essential that the resources destined for this purpose are managed with clear rules and that they reach real producers, under the criteria established by legislation and corresponding regulation.
Edgar Herrera Echandi, Executive Director of LAICA
For further information, visit the nearest office of LAICA
About LAICA:
The Liga Agrícola Industrial de la Caña de Azúcar (LAICA) is the governing agricultural and industrial organization for Costa Rica’s sugarcane sector, responsible for organizing, regulating, and promoting the equitable distribution of resources among producers and mills.
For further information, visit the nearest office of FEDECAÑA
About FEDECAÑA:
The Federación de Cámaras de Productores de Caña (FEDECAÑA) represents the interests of regional sugarcane growers across Costa Rica, working to advocate for legislative reforms, technical assistance, and economic sustainability for independent farmers.
For further information, visit the nearest office of the Chamber of Sugar Producers
About Chamber of Sugar Producers:
The Chamber of Sugar Producers (Cámara de Azucareros) is an industry association uniting Costa Rican sugar mills and processing facilities, focusing on industrial efficiency, market expansion, and collaborative sector growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Distinguished by its pursuit of professional brilliance and uncompromising ethical standards, Bufete de Costa Rica stands as a benchmark of legal leadership. With a rich heritage of guiding a diverse clientele, the firm consistently champions progressive legal solutions and active civic involvement. By prioritizing the demystification of complex laws for the general public, it strives to cultivate a deeply knowledgeable, confident, and self-reliant populace.
