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GlobalPost's continuing effort to answer an elusive, multi-billion-dollar question: "After Haiti's devastating earthquake, where did the aid money go?"

Haitian farmers call on US to stop subsidizing its own

The 2012 Farm Bill could reverse a decades-long policy of agricultural subsidies that has undercut Haiti’s local rice production.

PORT-AU-PRINCE, Haiti — Deep within Haiti’s beautiful Artibonite Valley, a man wades barefoot through loose mud that comes up to his knees. Bending over, he takes individual strands of rice seed from a clump in one hand, stuffing them quickly into the mud one by one.

Were he a hopeful man, Denis Jesu-car, 32, would tell you that four months from now, he’ll be rewarded with a few large sacks of rice that he can then sell in Haiti’s capital, Port-au-Prince, earning him enough to buy food until the next harvest season and send his children to school.

But Jesu-car is no longer hopeful. That’s because this farmer who rents a small plot of land he tends without modern tools or fertilizer is competing with giant American rice companies that produce hundreds of thousands of tons of better quality rice — and ship them to Haiti at artificially low prices.

“Artibonite used to be rich, but now it’s poor,” he says. “We produce rice, but it doesn’t sell.”

Since 1995 the US has given over $13 billion in subsidies to American rice farmers and continues to provide hundreds of millions each year. That keeps the price of American rice exported to Haiti significantly lower than rice produced by Haitian farmers, who receive no such assistance from their own government.

“If American rice was expensive, people would buy ours instead.”
~Linda Estiverne, rice grower and seller

Some economists and development workers say this imbalance helps large American rice producers but has only helped put Haitian ones out of business by forcing them to sell their crop at prices that barely cover production costs — if it sells at all.

“The fact that we don’t produce much means that we have to sell our rice very expensive,” said Haiti’s minister of agriculture, Docteur Hébert. “It’s almost double the price of the international market. That’s not normal.”

Now, following decades of enormous subsidies to US farmers, Congress is considering reversing that policy. The Senate began hearings last month on the 2012 Farm Bill — the five-year law that dictates America’s fundamental agricultural policy. On the table is the elimination of direct subsidies to US rice farmers, which Haitian agronomists say would give Haitian farmers like Jesu-car a chance to at last compete more evenly with rice from abroad.

“If American rice was expensive, people would buy ours instead,” says Linda Estiverne who brings the rice grown by Jesu-car and other Coupon farmers to markets in Port-au-Prince. “We’d love it if the prices went up because we’d sell more.”

The history of Haiti’s rice challenges

Just thirty years ago Haiti produced enough food to feed its population. But a combination of factors including rapid growth of the Haitian population helped rice become the dominant staple food over corn. Haitian dictators’ neglect of the nation’s peasants caused a decrease in rice production as the demand for rice spiked. The result was that in 1973, Haiti began looking abroad to fulfill its food needs.

Then in the 1980s and 1990s the International Monetary Fund and the US government pressured Haiti to reduce its tariffs on imported rice and other crops, which were eventually lowered from 35 percent to just 3 percent. The policy was intended to give American farmers a broader market to sell staple crops like rice and find a home for surplus production. It also allowed Haitians — the majority of whom lived and continue to live in poverty — to eat more cheaply. But because the rice could arrive at Haitian markets at a price lower than the true cost of production, foreign rice began to further undercut Haitian growers.

Freguens Neise, 32, walks through rice patties and vegetable gardens near the village of Coupon. He says most Haitians prefer to buy American rice because it's processed to remove the small rocks and dirt.
(Jacob Kushner/GlobalPost)

“The pressure by international powers to promote neoliberal policies effected rice production here significantly. Production dropped from 130,000 tons to 60,000 tons overnight,” says Hébert. “We couldn’t compete.” 

The policy largely continues today. In 2010 the United States spent more than four times as much on subsidies to help US rice growers than it did to help Haiti’s own agricultural sector recover from the devastating 2010 earthquake, according to data provided by USAID and the non-partisan Environmental Working Group.

“American producers benefit from a double subsidy system — subsidies to their production and subsidies to their exportation. This gives rice that arrives in Haiti a very low price,” said Camille Chalmers, director of the Platform for Alternative Development, an association of Haitian farmers. “The agricultural sector there is practically more like a social (service) sector than an economic one.”

The result is that more than 75 percent of the 440,000 metric tons of rice consumed in Haiti arrives from abroad — and 89 percent of that is cheap, American rice. In March the price in Port-au-Prince for a 55-pound bag of imported, American rice was $22.50 — less than half the price of locally grown Haitian rice, according to Haiti’s agricultural ministry.

One group of Haitians does benefit from the policy — rice importers and distributors. In Haiti, six importers control 70 percent of total rice imports, according to USAID.

“The few actors at the import level hold a significant amount of market power, and can adjust prices irrespective of import supply,” says an August 2010 USAID report. “At the bottom of this market chain stand the retailers and consumers, who are involuntarily pulled and pushed according to decisions made at the top of the market chain.”

One such importer is the Deka Group, which brings in rice, flour, sugar, maize, evaporated milk and other products. Deka is one of only five companies in all of Haiti whose earnings exceed $100 million annually.

Once rice is imported, nearly all is distributed through just ten wholesalers.

Representatives from two of the largest, Tchako SA and the Caribbean Grain Company (owners of Mega Rice), declined interview requests from GlobalPost. In an interview with the Associated Press in 2010, a representative of Riceland Foods Inc. of Stuttgart, Arkansas — which distributes in Haiti through Tchako SA — said that “Haiti doesn’t have the land nor the climate … to produce enough rice. The productivity of US farmers helps feed countries which cannot feed themselves.”

http://www.globalpost.com/dispatch/news/regions/americas/haiti/120411/haitian-farmers-call-us-stop-subsidizing-its-own