Wednesday, March 4, 2009

A Closer Look at Haiti and the US' Continued Role in the Food Crisis

A woman prepares mud cakes to sell for food. Mud cakes, made by mixing oil, sugar, and mud, have grown in popularity as a means to take the edge off of hunger. Associated Newspapers (UK), August 2008.

Haiti by the Numbers

GDP Per Capita: $573.70 (about $1.57 per day)
On average, Haitians spend 75% of their income on food alone
In the US, if you spend over 1/3 of your income on food, you are considered impoverished.
80% of Haitians live in abject poverty(2003)
Haiti also has one of the largest wealth disparities in the world
Following the debt crisis of the 1980s, Haiti now owes $1.5 billion dollars in loans. For all of the aid money flowing from the US to Haiti, more of it is flowing back to us in the form of debt payment
66% of Haitians are farmers although it only comprises 30% of the GDP.
Literacy rate: 52.9%, the lowest in the region. Only 20% of children make it to high school

Haiti has always been unstable – most lately, the riots that broke out last April reinforced the notion that Haitians need to “get their act together.”

April 8, 2008:

"UN Peacekeepers fired rubber bullets and used tear gas to control mobs rioting over rising food prices in Haiti... for months, Haitians have compared their hunger pains to
"eating Clorox" because of the burning feeling in their stomachs" - The Guardian, UK

April 18, 2008:

Marc Lacey of the New York Times publishes a compassionate article for the victims of the spike in food prices, but says "Haiti, its agriculture industry in shambles, needs to better feed itself."

Before 1986, Haiti was self-sufficient in rice production

Nineteen Eighty-Six

January - February: Dictator Baby Doc is ousted by the US government. He flees, taking with him all of the money in Haiti's treasury

April: American Rice, Inc., succeeds in lobbying Congress for subsidies on their rice. They can now sell rice that costs $400 to produce for only $250

December 30, just eight months later, the International Monetary Fund, influenced heavily by US businesses, offers a $24.6 million loan to Haiti - with the stipulation that they would cut public spending and liberalize their trade policy - that is, virtually take away their tariffs on imported goods. Haiti, about to default to bankruptcy, accepts.


Subsidized US rice floods the country. Haitian consumers rejoice at the low prices. Within two years, most subsistence farmers are put out of business.

The newly-subsidized American Rice, Inc., gradually secures its monopoly over the Haitian market. Haiti becomes the #3 importer of American rice in the world.

No longer producing its own food, Haiti transforms from a net exporting country to a net importer. It becomes very sensitive to changes in the global food market.

Millions of people move from rural areas to urban areas to find work. In cities, all food is purchased, not grown, leaving the urban population especially sensitive to the globalized economy.

Now, Haiti is sensitive to the global food market. When prices rise, people starve, and then riot. It is stuck in debt, imports more than it exports, and its political and economic policies are indirectly controlled by the people they owe money to - notably, the World Bank and the IMF

Why Did the IMF include stipulations to liberalize the economy?

Theory #1: The IMF believes int the "free market theory" and that capitalism is best for all. Providing cheap rice to impoverished people can't be bad, right?

Theory #2: The US wanted to flood Haiti's market with rice so that we (and American Rice, Inc., which was struggling in the international markets) could gain a major importer of our goods

Theory #3: The IMF, created after WWII to regulate the international currency to the gold standard, lost its mission in 1971 when the gold standard was suspended.

Since then, it has been looking for a reason to exist. It established itself as global economic policeman. It began with loans during the oil crisis of the 1970s, to more powerful loans during the debt crisis of the 1980s.

The IMF has emerged as one of the most powerful organizations in the world, powerfully influencing the political, social, and economic policies of virtually every developing country in the Western Hemisphere.

First-Hand Accounts of the Impact of Subsidized Rice

"American rice invaded the country. It was sold for so little that we could not compete. There was a very serious struggle. When they brought the [American] rice up from Port-au-Prince, they had to escort it in military convoys, to prevent us from seizing it. By 1987 and 1988, there was so much rice coming into the country that many of us stopped working hte land," - Charles Suffrard, rice farmer.

“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.” – Dr. Paul Farmer

“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.” – Fr. Gerard Jean-Juste

Recent History

March, 2000 - 60 rice farmers and their families pool their money and buy a rickety boat to sail 150 miles north to some British islands to escape their poverty. The boat capsized, killing everyone on board.

In Haiti, most former farmers are living in the slums of the city.

“I come here every day in the hope that one day there will be work, but there never is. When I leave the house, my children
hope that I will earn enough money to come back with food. But very often, I have to walk home because I don't have enough money for a bus.” - former farmer living in the slums of Port-au-Prince

With employment down, and importation up, urban Haitians are very sensitive to changes in food prices.

From 2007 - 2008, the price of basic foodstuffs went up 40%.

Two factors contributed to the outbreak of riots around the world in April - an announcement of new subsidies for the biofuel industry, and a spike in rice prices.

The US is a central exporter of rice and corn, two basic foodstuffs. The price of both have risen drastically in the last few years.


Next - Ethanol and the Food Crisis