What happens to poor countries when they embrace free trade? In Haiti in 1986 we imported just 7000 tons of rice, the main staple food of the country. The vast majority was grown in Haiti. In the late 1980s Haiti complied with free trade policies advocated by the international lending agencies and lifted tariffs on rice imports. Cheaper rice immediately flooded in from the United States where the rice industry is subsidized. In fact the liberalization of Haiti’s market coincided with the 1985 Farm Bill in the United States which increased subsidies to the rice industry so that 40% of U.S. rice growers’ profits came from the government by 1987. Haiti’s peasant farmers could not possibly compete. By 1996 Haiti was importing 196,000 tons of foreign rice at the cost of $100 million a year. Haitian rice production became negligible. Once the dependence on foreign rice was complete, import prices began to rise, leaving Haiti’s population, particularly the urban poor, completely at the whim of rising world grain prices. And the prices continue to rise. What lessons do we learn? For poor countries free trade is not so free, or so fair. Haiti, under intense pressure from the international lending institutions, stopped protecting its domestic agriculture while subsidies to the U.S. rice industry increased. A hungry nation became hungrier. Jean-Bertrand Aristide, Eyes of the Heart; Seeking a Path for the Poor in the Age of Globalization, (Common Courage Press, 2000), pp. 11-12
Posted on: Wed, 22 Oct 2014 18:10:00 +0000
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