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Haitian farmers call on U.S. to stop subsidizing its own
Submitted by CHAN on April 12, 2012 - 09:00
By Jacob Kushner, published on Global Post (Fault Line project), April 12, 2012
(The online story includes an informative, four minute video on the story of rice production in Haiti.)
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. 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. “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.”
Struggling to produce
But Haitian rice farmers say the solution to the nation’s unmet rice demand isn’t to have the United States feed the country, but rather to help Haitians once again produce enough to feed themselves.
Back in the village of Coupon in the Artibonite Valley, farmers toil away with outdated and non-mechanized equipment. They lack proper irrigation and drainage trenches that would protect their crops from floods during the rainy season. “We have a lot of land in Haiti that could produce rice, but they don’t because we don’t have tractors, fertilizer, irrigation,” said Jean Jude, a rice grower and pastor of a church in Coupon where an association of farmers meets to discuss shared problems and work together to purchase fertilizer and seed.
Unlike American rice which is processed in large production facilities capable of removing dirt and grime and leaving the rice a uniform, white color, most of Haiti’s rice is still de-hulled by hand. “People don’t like this rice because there are little rocks that could break their teeth. So people who come usually buy American rice,” explained Freguens Neise, a 32-year-old farmer in Coupon who grows rice, potatoes and other crops.
Karen Hansen-Kuhn, director of international programs for the Institute for Agriculture and Trade Policy which researches the effects of US agricultural policy abroad, says improving the ability of farmers in developing nations like Haiti to meet their own consumption needs depends first on increasing local production. “What really needs to happen is we need to expand more comprehensive agricultural development programs geared toward supporting local farmers to grow local foods sustainably and without reliance on foreign (food).”
The US government claims to have “introduced improved seeds, fertilizer, and technologies to more than 9,700 farmers” through its five-year, $127 million Feed the Future program, formerly known as WINNER. Participating farmers have seen “increased rice yields by 64 percent, corn yields by 338 percent, bean crops by 97 percent, and plantain outputs by 21 percent,” USAID claims. But here in Coupon, residents say they have received none of that assistance. The only foreign entity working in the town is a Taiwanese technical program that invites farmers them to pool their resources and buy fertilizer on credit, to be paid back at harvest time.
Volny Paultre, a Haitian agronomist for the United Nations Food and Agriculture Organization, says there are four factors that limit the production and sale of Haitian rice. The first is land. According to the Inter-American Development Bank, 63 percent of Haiti’s farmers work plots of a quarter-hectare or less or about 2.5 acres. “When someone has one-fourth of a hectare, it’s not enough even for the family to live off of” because their production is immediately limited by access to growing space, says Paultre.
This leads to the second obstacle: credit. The few agricultural banks that exist in Haiti offer loans starting at a daunting 34 percent annual interest rate, which Haiti’s rice farmers either can’t afford or are barred from applying for altogether because they don’t have enough land to make loan repayment viable.
The third challenge is that the absence of modern rice processing facilities like those used in the United States results in the sort of poor quality rice contaminated with dirt and rocks that Coupon residents say are a turn-off to consumers.
The fourth challenge Paultre describes is that tariffs on imported rice — lowered due to US pressure in the 1980s and 1990s — “leads to unfair competition with domestic production.” Add to that billions of dollars in subsidies to American rice farmers that lower the price further and competition becomes impossible.
If Congress were to reduce or eliminate those subsidies, “The costs of foreign production would be higher than that of American production,” said Paultre. “Local production will have a better chance and we will support our reliance on Haitian rice farmers.”
Congress could eliminate subsidies in 2012 Farm Bill
The American Jewish World Service, which funds long-term agricultural and economic development in Haiti, released a report in February that concluded 2012 could well be the year in which Congress puts an end to decades-long policy of direct subsidies to American farmers. The report points out that Congress may have set a precedent when it allowed subsidies for ethanol production — what it calls “one of the sacred cows of agricultural policy” — to expire at the end of the last year. Today, AJWS and other groups like Oxfam International are asking legislators to eliminate direct subsidies to growers of “program crops” including rice.
Indeed, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) indicated last month that the “era of direct payments” to American farmers is coming to a close, which could signal a victory for reformers.
Opposition will likely come from lawmakers in America’s rice-producing states that received the bulk of the subsidies. Arkansas rice growers received 43 percent of total subsidies over the past 15 years, followed by California (19 percent), Louisiana (15 percent) and Texas (12 percent). Constituent farmers in these states and others depend upon heavy rice subsidies to produce the crop at a price low enough to sell abroad.
But the determining factor as to whether Congress will cut subsidies may actually end up having little to do with farmers in developing nations like Haiti, and everything to do with the US budget deficit. “There will be a lot of pressure to reduce the budget,” said Hansen-Kuhn, who believes Congress is likely to further reduce subsidies as they did in the 2008 bill.
But the ongoing stalemate in the currently divided Capitol means there’s a risk that no compromise will be reached at all by the time the current bill expires in September — in which case US agricultural law would technically revert back to the 1949 version of the bill.
The Haitian farmers’ advocate Chalmers says Congress owes it to Haitian farmers to eliminate direct subsidies to American rice producers. “It creates food dependence and food insecurity,” he said. “And it’s a problem also because a lot of money leaves the country when it could return to help our national economy.”