Impact of humanitarian aid and subsidies to the Haitian economy
The crop originated from the West African region where they practiced rice production. Haiti has however not been able to produce enough rice for domestic consumption since the year 1980s and has therefore being dependant on imported rice. The importation of rice from other countries impacted negatively on the Haitian farmers who relied heavily on the income generated from rice production. The traders, millers and farmers became unemployed and others became relocated. This paper investigates the impact of humanitarian aid and rice subsidies by the United States on the Haitian economy. Favorable trade policies are usually advocated or by the global institutions such as the World Bank and the international monetary fund. In 1994, the government o Haiti signed an agreement with the international monetary fund to reduce its import tariffs from 35% to 3%.
This reduction made the country to have the lowest form of restriction to imported rice among the Caribbean countries. These tariffs impacted negatively on the economy of the country making it the poorest economies among the western countries. The individuals residing in the rural areas were the worst hit by the reduction in the production of rice. However the Solow model has its own short comings, in that it fails to reconcile with the real world economy. The empirical findings in countries that have similar technological level and population growth rate have witnessed different levels in the economic growth rate. Another limitation of the model is that it assumes the economic forces do not affect the technological progress. The economic forces such as inflation, price fluctuations, government policies such as taxation, and rates of interest among other market forces influence how the businesses are run and the performance.
The model emphasizes that the only the level of capital investment and labor affect the performance of businesses in terms of production. Currently, the United States rice has dominated the Haitian market becoming a monopoly. This has forced the Haitian farmers to sell their rice at a low price that does not only fail to generate any profits but also cover for the costs of production. International organizations and some Haitians have constantly accused the United States for making Haiti the dumping ground for its rice. Harsh environmental factors have also contributed to the decline in the production of rice. The farmers in Haiti are equipped in such a way that they are capable of producing the large amounts of rice.
The farmers are forced to grow low quality rice which gives low revenues. Other factors are the use of machines that are inefficient in rice farming and thus contributing to the low yields. Poor storage is also another issue that the farmers have been facing hence the decline in rice production. This implies that the farmers have to immediately sell their products and at a low price to ensure that the rice is competitive enough with the imported brand in the market. Bill Clinton, the former United States president issued an apology to the Haitians, citing the unfortunate step that he took that resulted in the food scarcity in Haiti. It is commonly found in the southern parts of Asia as well as the lower Mississippi region.
The medium grain rice is the second category in the rice family. It is mostly grown in the countries of China, Japan, Korea and some parts of California. It dominates a 12% market share globally. The aromatic type of rice comprises of the basmati rice and the rice from Thailand. Currently, the highest trade barriers on imports are in north eastern parts of Asia. Countries like Korea and Japan had implemented complete bans on rice that had been imported. This however changed slightly, after the introduction of the agreement known as the ‘Uruguay Round’s Agreement’. The current tariff rate in Japan is 7. This rate applies when the recommended level of imported rice is reached and hence any extra amount of imported rice is charged the tariff rate.
The tariff rates the make it unfavorable to import rice into the United States have supported the local farmers. The government has put in place three major programs that are meant to assist the farmers in the farming. In 2002, the Farm Security and Rural Investment Act was passed to assist the farmers. The first provision in the bill advocated for the direct payment of farmers. The farmers are paid according the previous amount of land that had been cultivated and the average amount of crops that had been harvested. What remaining rice is grown will obviously be at a higher price, and we’re going to be less competitive in the world market. Over the long haul, if we’re less competitive that means fewer exports.
" These programs by the federal government to assist the rice farmers however have their shortcomings on the American taxpayer. The costs associated with the rice program are included in the country’s budget. The amount of revenue spent I this program depends on the market price of the rice. The government of Haiti has failed in protecting the interests of its citizens. The country is now known as the “republic of non-governmental organizations”. International organizations intervened to form NGOs that would safeguard the interests of the people. The intention has however not been met due to the many organizations that claim authority over the country. The NGOs are also more powerful than the central government to the foreign aid that they receive from the donors.
In the 1990s, most Haitian population migrated to the United States of America to search for better living standards. The women are treated badly compared to the men who migrate to the country. The women are also sexually violated and not allowed to work or accorded any benefits such as medical care, housing among other basic services. To become financially stable, the Haitian women have resorted to selling charcoal, labor and wood in other countries. The importation of rice to Haiti by the Americans has caused the Haitian women to work harder to provide for their families due to the decline in rice production. However, there has been very minimal representation of women in the political arena. The NGOs have also played a significant role in providing social services such as education and healthcare.
The women are unable to pay for education for their children and especially the young girls. According to (Palmer 237), “When resources are scarce, girls have less chance of getting an education. ” The young girls are expected to help with the household chores such as taking care of the younger ones, cooking, marketing and fetching water. This leads to some of them practicing prostitution to provide for their families. Haiti has continued to be the poorest republic in the Caribbean. Their least restrictions on imports have contributed to the dumping of rice in the country from countries such as the United States. This has made it more impossible for the Haitian farmers to earn a proper living from the farming of rice.
Some critics have questioned the intention of the American government in providing humanitarian aid to the Haitian population, given their inability to help their own citizens during the Katrina hurricane. This move has not only affected the financial status of the Haitians but also their health and ability to access basic social services such as education. Roles have also reversed where the women have also been forced to work extra hard to provide for their families. Families have also being separated as the men migrate to other countries to seek for employment opportunities to provide for their families. If only the concerned parties would be mindful of the interests of the Haitian poor population and not their selfish ambitions, then this economic situation in the country would be reversed.
The country should also focus on other viable economic ventures and diversify to prevent overreliance on one economic activity that affects the economy if natural calamities or market fluctuations occur. Dupuy, Alex. “Disaster Capitalism to the Rescue: The International Community and Haiti After the Earthquake. ” NACLA Report on the Americas, vol. 43, no. 4, 2010, 14-19, DOI: 10. cfm?abstract_id=975688 This paper talks about how subsidies in general affect other economies. Although this does not talk about Haiti in particular, it will allow me to demonstrate how rice subsidies come at a cost to Haitians and their economy. O’Connor, Maura. “Subsidizing Starvation. ” Foreign Policy, 11 Jan. claremont. edu/scripps_theses/225 This article talks about rice imports from the United States. It will allow me to demonstrate how imports have affected the people of Haiti.
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