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    Repiglican Roast

    A spirited discussion of public policy and current issues

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    I'm furious about my squandered nation.

    Sunday, August 03, 2008

    How the IMF, World Bank, and America Starves Haiti & Other Countries

    Inside Haiti's Food Riots

    Thirty years ago, Haiti raised nearly all the rice it needed. What happened?

    In 1986, after the expulsion of Haitian dictator Jean Claude “Baby Doc” Duvalier, the International Monetary Fund (IMF) loaned Haiti $24.6 million in desperately needed funds (Baby Doc had raided the treasury on the way out). But, in order to get the IMF loan, Haiti was required to reduce tariff protections for Haitian rice and other agricultural products and some industries, to open up the country’s markets to competition from outside countries. The US has by far the largest voice in decisions of the IMF.

    Doctor Paul Farmer was in Haiti then and saw what happened. “Within less than two years, it became impossible for Haitian farmers to compete with what they called ‘Miami rice.’ The whole local rice market in Haiti fell apart as cheap, US subsidized rice, some of it in the form of ‘food aid,’ flooded the market. There was violence … ‘rice wars,’ and lives were lost.”

    “American rice invaded the country,” recalled Charles Suffrard, a leading rice grower in Haiti in an interview with the Washington Post in 2000. By 1987 and 1988, there was so much rice coming into the country that many stopped working the land.

    The Rev. Gerard Jean-Juste, a Haitian priest who has been the pastor at St. Claire and an outspoken human rights advocate, agrees. “In the 1980s, imported rice poured into Haiti, below the cost of what our farmers could produce it. Farmers lost their businesses. People from the countryside started losing their jobs and moving to the cities. After a few years of cheap imported rice, local production went way down.”

    Still, the international business community was not satisfied. In 1994, as a condition for US assistance in returning to Haiti to resume his elected presidency, Jean-Bertrand Aristide was forced by the US, the IMF and the World Bank to open up the markets in Haiti even more.

    But Haiti is the poorest country in the Western Hemisphere; what reason could the US have for destroying the rice market of this tiny country?

    Haiti is definitely poor. The US Agency for International Development reports the annual per capita income is less than $400. The United Nations reports life expectancy in Haiti is 59, while in the US it is 78. Over 78 percent of Haitians live on less than $2 a day, more than half live on less than $1 a day.

    Yet, Haiti has become one of the top importers of rice from the United States. The US Department of Agriculture 2008 numbers show Haiti is the third-largest importer of US rice - at over 240,000 metric tons of rice. (One metric ton is 2,200 pounds).

    Rice is a heavily subsidized business in the US. Rice subsidies in the US totaled $11 billion from 1995 to 2006. One producer alone, Riceland Foods of Stuttgart, Arkansas, received over $500 million in rice subsidies between 1995 and 2006.

    The Cato Institute recently reported that rice is one of the most heavily supported commodities in the US - with three different subsidies together averaging over $1 billion a year since 1998 and projected to average over $700 million a year through 2015. The result? “Tens of millions of rice farmers in poor countries find it hard to lift their families out of poverty because of the lower, more volatile prices caused by the interventionist policies of other countries.”

    In addition to three different subsidies for rice farmers in the US, there are also direct tariff barriers of three to 24 percent, reports Daniel Griswold of the Cato Institute - the exact same type of protections, though much higher, that the US and the IMF required Haiti to eliminate in the 1980s and 1990s.

    US protection for rice farmers goes even further. A 2006 story in The Washington Post found that the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all; including $490,000 to a Houston surgeon who owned land near Houston that once grew rice.

    And it is not only the Haitian rice farmers who have been hurt.

    Paul Farmer saw it happen to the sugar growers as well. “Haiti, once the world’s largest exporter of sugar and other tropical produce to Europe, began importing even sugar - from US-controlled sugar production in the Dominican Republic and Florida. It was terrible to see Haitian farmers put out of work. All this speeded up the downward spiral that led to this month’s food riots.”

    After the riots and protests, President Rene Preval of Haiti agreed to reduce the price of rice, which was selling for $51 for a 110-pound bag, to $43 dollars for the next month. No one thinks a one-month fix will do anything but delay the severe hunger pains a few weeks.

    Haiti is far from alone in this crisis. The Economist reports a billion people worldwide live on $1 a day. The US-backed Voice of America reports about 850 million people were suffering from hunger worldwide before the latest round of price increases.

    Thirty-three countries are at risk of social upheaval because of rising food prices, World Bank President Robert Zoellick told The Wall Street Journal. When countries have many people who spend half to three-quarters of their daily income on food, “there is no margin of survival.”

    In the US, people are feeling the worldwide problems at the gas pump and in the grocery. Middle-class people may cut back on extra trips or on high price cuts of meat. The number of people on food stamps in the US is at an all-time high. But in poor countries, where malnutrition and hunger were widespread before the rise in prices, there is nothing to cut back on except eating. That leads to hunger riots.

    [...]

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