– By Nancy Dubosse –
I appreciate Pat Robertson’s historical analysis on the causes of the earthquake in Haiti. By all accounts, the Haitian Revolution has everything a great story should have. It starts off with the search for and struggle over gold, then sugar, then coffee. There are fascinating military manoeuvres, which occurred in and around the country’s exceptionally mountainous terrain. It has more than enough drama (e.g. the rage demonstrated by Jean Jacques Dessalines, the Commander in Chief, when he ripped out the white part of the French flag to form the Haitian flag). It has memorable speeches. It has vodou ceremonies, sex, and yellow fever. It has revenge, incidents of both black and white genocide; it even has some instances of mercy.
But that is the story up to 1804, and Robertson forgot to point out what has transpired in the country since then. So, in order to remind everyone of what Haitians have experienced, I’ll be writing a series of blog entries on how Haiti arrived at this point (and it wasn’t because of a vodou ceremony).
In case you were wondering why a city with a capacity to accommodate only about 400,000 had a population of an estimated 4,000,000 people, a short story of the rice industry might help in understanding why there was a mass migration to the capital of Port-au-Prince.
Rice is the Haitian staple food. Rice has been grown in Haiti for centuries, and until thirty years ago, Haitian farmers produced about 170,000 tonnes of rice a year, enough to cover 95% of domestic consumption. Rice farmers received no government subsidies, but, as in every other rice-producing country at the time, their local markets were protected by import tariffs.
The number of families engaged in rice production in the early 1990s was 93,000 (cultivation and processing). Other groups included supplemental agricultural workers (22,000), local traders (8,000), and millers (400). But that all disappeared and two culprits are trade liberalization and bad governance.
Under pressure from donors, import tariffs were cut from 35% to 3%. In comparison, the CARICOM, the Caribbean economic community, tariff is around 25%. Haiti eventually became the fourth largest market for US rice in the world. Rice imports increased by more than 150% between 1992 and 2003, with 95% of imports coming from the USA. According to Oxfam, the price of rice in urban areas fell by 25%, which raised the perpetual conflict between urban and rural populations. The lowering of tariffs made rice more affordable in urban areas and caused the decline of rural incomes, as rice farmers were now unable to compete. This is one of the reasons that they migrated to the city.
In 2002, a scandal was unveiled concerning senators and deputies from Fanmi Lavalas, who imported 70,000 metric tons of rice, duty-free, under a cooperative arrangement associated with the Aristide Foundation for Democracy. It has been estimated that the duty exemption translated into a 117 million gourdes loss ($4.68 million) for the Haitian treasury.
Here is where governance plays a key role in assuring the livelihoods of its citizens, ensuring compliance with customs laws, and stemming corruption.
Parliamentarians were each given a card by the Aristide Foundation to claim 400 sacks of rice to be distributed among their constituencies. The rice, which normally sold for $32 per 110lb sack, was not freely distributed but sold by the parliamentarians for 250 gourdes ($10) a sack.
Aside from the scandalous arbitrage, there are systemic issues fueling the decline of the rice industry. It has been reported that it was the de facto Prime Minister Marc Bazin, who granted the U.S.-based Rice Corporation the monopoly for importing rice, which continues to destroy national production. In short, Haiti was forced to abandon government protection of domestic agriculture – and the U.S. then used its government protection schemes to take over the market.
If you were thinking that the US is just a more efficient rice producer, you would be wrong. The global rice regime notwithstanding, the dumping of rice by the US has been tolerated by Haitian authorities. The marginal cost of producing one tonne of milled rice in the US was $415 between 2000-2003. However, with government subsidies it was able to dump rice on international markets at $274 per tonne, a margin of 34%. Now having put the Haitian rice industry out of business and that of other developing countries, global food price began to rise, with a bag of rice in Haiti going for $51 for 110lb bag just before the riots against food prices in April 2008.
Why hadn’t the Haitian government banned US rice imports? Why hadn’t it filed a case at the WTO against the US for dumping? Dumping is defined as a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. Why hadn’t it created other opportunities in the countryside to sustain rural livelihoods?
Filed under: Citizen Empowerment, Economic Governance, Political Governance | Tagged: CARICOM, Corruption, governance, Haiti, trade, Transparency | 1 Comment »
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