Food Aid Undermines Local Producers

February 26, 2010

*This post has been edited slightly for accuracy.

The AP reports today on the effects of US rice on Haitian farmers:

Subsidized U.S. rice has flooded Haiti for decades. Now, after the Jan. 12 quake, 15,000 metric tons of donated U.S. rice have arrived.

With planting season right around the corner, and experts warning of another food crisis, how this US rice is affecting farmers is of the utmost importance. The AP reports that the price of a 55-pound bag of local rice is $60, while US rice costs about $36. The article states:

The U.S. Agency for International Development, which has been working in Haiti for decades, is providing more than $400 million in earthquake aid with U.S. taxpayers set to give some $113 million in food aid alone this year.

But U.S. farmers also stand to benefit from the earthquake.

Last year, Washington paid farmers some $12.9 billion in subsidies, which critics say have unfairly deflated international prices. That makes it harder for poorer nations to develop their economies by expanding markets abroad.

Paul O’Brien of Oxfam America says the lessons of the harm of flooding a country like Haiti with subsidized rice should have been learned a long time ago.

“The days are gone when we can throw up our hands in terms of unintended consequences; we know now what these injections can do to markets,” he said. “The question we want asked is what is being done to guarantee long-term food security for Haitians.”

Although USAID says that it undertakes studies to determine the consequences of US food aid on local producers, AP reports:

Whelan [USAID spokeswoman] would not respond, however, when asked what the analyses had determined in Haiti.

Currently, USAID has a contract with Chemonics to monitor the food prices in Haiti. Chemonics was a subsidiary of ERLY industries, who was also the parent company of Comet Rice. According to a Washington Office on Haiti report, as reported by Food First:

RCH began operations in September 1992 when former World Bank official and post 1991 coup leader Marc Bazin’s regime signed a nine year development aid contract with RCH. RCH’s corporate parent is Comet Rice. Comet Rice has been the largest importer of rice in Haiti for many years. The flood of its imported “Miami rice” in the 1980s, much of it supported by U.S. tax dollars through various AID and USDA programs, drove thousands of small scale Haitian rice farmers out of business. Corn and other grain production also declined due to the importer’s marketing techniques.

The FAO, in coordination with the Haitian government, does have an agricultural plan however it remains inadequately funded. The FAO warned two weeks ago that only 8% of the $23 million needed has been funded. Today the most recent UN OCHA report confirms that nothing has changed:

“The Agriculture secor remains only 8 percent funded. More resources are needed to ensure that seeds can be purchased ahead of the planting season in March in order to prevent longer-term dependency on food assistance.”

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