FAO.org

The high cost to Ecuador’s national budget of maintaining a minimum guaranteed producer price for rice led to the introduction of a price bracket system in 2017. The minimum support price policy and a complimentary high import tariff were meant to protect small rice producers from competition from world markets and increase their incomes. However, farmers with greater productive capacity are currently accruing the highest income transfers from the guaranteed minimum rice price. Moreover, the policy has led to distortions throughout the marketing chain, only partially meeting its objective of price stability. The introduction of the price bracket system and Ecuador’s new comprehensive agricultural strategy, which takes an agricultural food system approach, represents an opportunity for small farmers to receive the necessary incentives to remain a part of the rural economy. However, more needs to be done to achieve a sustainable rice supply chain like decoupling social protection policies from farm output, diversifying agricultural programs, reforming border protection policy, and a rethinking of public interventions.