SHOULD COSTA-RICA GRAIN MARKETS BE LIBERALIZED

Government interventions have distorted the major grain markets in Cos ta Rica since the 1940s. While Initially intended to achieve price sta bilization and food security goals, especially for the poor, these int ervention policies have become less relevant today given much higher p er capita incomes, improved rural infrastructure and transport systems , and ready access to world markets. This paper shows that significant national economic savings could be achieved if the grain markets were liberalized. Moreover, since current policies are shown to transfer i ncome from consumers and poor farmers to large-scale rice farmers, mar ket liberalization would in most cases assist rather than hurt the poo r.