Rice Price Protests by Producers in Ecuador Push Ag Minister to Resign

QUITO, ECUADOR –Tanlly Vera, Ecuador’s minister of agriculture and livestock, resigned from the Cabinet of President Guillermo Lasso last week after less than four months on the job.  

Minister Vera was appointed in May 2021 and was under significant pressure by rice farmers to provide a price guarantee that is equivalent to about $17.50 per hundred weight (cwt) of rice, instead fixing the price between $15 and $16 per cwt.  Because Vera was unable to negotiate rice prices at the higher rate, a promise made during President Lasso’s campaign, rice producer organizations worked to organize protests and road closures that have caused further harm to the Ecuadorian economy.

In addition to protest by Ecuador’s rice industry, similar geopolitical outbursts have been organized by banana producers, teachers, students, and transporters that are upset over increased fuel costs.

Ecuador, a country of more than 17 million that is slightly smaller than Nevada, is not currently a strong market for American rice as it’s one of the few countries in Latin America without an actual Free Trade Agreement with the U.S.  

“Ecuador could be a viable market for the U.S. someday, but unfortunately they have a number of protective measures in place, including a 67.5 percent tariff on milled and brown rice, and phytosanitary requirements,” said Asiha Grigsby, USA Rice director of international promotion for the Western Hemisphere.  “The U.S. does ship a few hundred tons of medium grain there most years, but nothing significant at this point.”

Ecuador produces about one million metric tons of rice per year and typically imports less than 50,000 MT.  The government-fixed price makes rice a profitable commodity, but increasing pest pressures in a humid tropical climate means that domestic rice quality and yields often suffer.

“Like much of Latin America, rice is a staple food in Ecuador, so there’s always a possibility that their production situation won’t be able to keep up with demand and thus create an opportunity for the U.S. or South American exporters to fill that gap,” said Grigsby.

Officials from the Office of the U.S. Trade Representative met with Ecuador’s government in August 2021 for limited trade discussions.  Following the meeting, the two sides agreed to convene the fourth Trade and Investment Council meeting before the end of the year.  This continued dialogue could eventually lead to some form of Free Trade Agreement negotiations with Ecuador.