Posted on 03/15/2017 11:39:50 AM PDT by TBP
Crop dumping is one of the most pernicious forms of U.S. foreign aid. Crop dumping is the transfer of massive amounts of food into an economy for free or at a below market price to feed “starving children.” The intention is lovely, but the policy carrying out the intention is abhorrent.
These farmers cannot compete with the price of zero.
In May 2016, the United States Department of Agriculture was caught in the act of “crop dumping” when they shipped 500 metric tons of peanuts to Haiti. Haitians and aid groups pleaded against this act of crop dumping, as it undermines the peanut industry in Haiti which is home to over 150,000 peanut farmers. These farmers cannot compete with the price of zero, and that is what they must do when the U.S. insists on dumping crops. Haiti has many of its own problems with economic freedom, so the transition from one type of industry to another is painstaking or impossible. The U.S. insistence on providing foreign aid with a disregard to Haitian markets endangers the economic livelihood of Haiti. This was not the first time we interfered with the Haitian economy.
Haiti was once an economy with a strong rice industry. Pressured by the U.S. and other international creditors, Haiti undertook trade liberalization during the 1980’s, and this coincided with the U.S. Food Security Act of 1985 which heavily subsidized the U.S. rice industry. During the 1990’s, the U.S. was responsible for dumping rice into Haiti. The U.S. flooded the Haitian economy with what came to be known as ‘Miami rice’ because the rice came from the port in Miami. As Haitian imports of rice replaced domestic production, artificially depressed prices for rice drove Haitians out of the rice industry altogether. The U.S. subsidizing its own industries caused many Haitian rice farmers to fail and forced Haitians into foreign aid dependence. At the time, Haiti’s rural population largely made their living in the agricultural industry. The Haitian farmers competed through the private market and the price system, but the U.S. did not compete with such integrity, instead electing to sell surplus goods at non-market prices. Haitian farmers deserved a chance to compete, but U.S. policy killed Haitian opportunities to escape poverty.
Haitian Sugar Production
The U.S. must eliminate the agricultural and foreign aid policies that have propagated Haiti’s economic stagnation.
Haiti is no longer a heavy producer of sugar, but if they had the freedom to export sugar to the U.S., Haitian entrepreneurs could find the sugar market as profitable. Nothing is free, and the American consumers are in charge of picking up the tab through higher prices and taxes. The problem is not limited to the peanut and rice markets. Sugar markets are restricted by bad rules as well. Researchers at The Heritage Foundation found that “Since the turn of the millennium, Americans have paid an average of 79 percent more for raw sugar and 87 percent more for refined sugar compared to the average world price.” Why are prices so high? The U.S. still has protectionist policies in place, some of which date back to the New Deal. Protectionist policies do not lead to a prosperous nation and are representative of the crony capitalism from which Americans suffer.
U.S. policy has long contributed to the failure of the Haitian economy. Policies like the American Marketing Agreement Act of 1937 which allows for the USDA to issue marketing orders are a societal shame, should be repealed and never repeated. These types of policies restrict output with the intention of keeping prices high. Higher prices hurt consumers domestically, and dumping our excess crops into foreign markets is immoral because of the negative consequences.
The intention of feeding people is not immoral, but the policies carrying out the good intention are deeply flawed. The mutually beneficial exchange that would otherwise occur has been replaced by waste and suffering. The U.S. must eliminate the agricultural and foreign aid policies that have propagated Haiti’s economic stagnation. The unseen consequences of U.S. policy may get even worse for the Haitian economy. The intentions of providing Haitians with free food threatens the Haitian agricultural industry and has been detrimental to their growth. U.S. policy clouds the foresight of entrepreneurs and prevents sustainable growth investments from which both Americans and Haitians could benefit. The fault does not fall on the Haitian people; rather it is their institutions and our institutions that need reform. The world has failed Haiti through enacting bad policies. The U.S. should learn from our past mistakes and feed people through the most efficient way possible--the private market.
There are a lot of economists — many from Ivy league schools — who work hard to “improve the situation” in third world countries like Haiti. The World Bank, The IMF, plenty of other organizations. These economists have big ideas on how to make life better.
Unfortunately, these are the sorts of economists who have no grasp of “supply and demand”.
In other words, they are not really economists. They are just evil tools of Satan who want to exploit the poor people around the world. And if some of the starving kids can be distributed through child prostitution networks, so much the better.
Are you CERTAIN that they're trying to make anyone's life better, other than their own?
same issues
Sorry my sarcasm and scorn was not dripping enough. These people are looters, pure and simple. The media tries to pretend that they have good intentions, but I say they have nothing of the kind. They are 100% out for themselves. The Clinton Foundation is a prime example.
If food must be gifted, there must be some sort of metric or algorithm that would let the aid agencies know how much can be given away directly to help the poor versus how much should be given to the Haitian farmers to subsidize what they need to sell to survive.
It could just be bad juju!
I agree that we suffer from crony capitalism but I also think that protectionism has its place.
Wouldn’t you think the geniuses from Wharton and Stanford could get together and figure out how much food grain a nation needs, subtract the amount the country can produce itself, and then supply just enough to feed the population? That would keep prices stable and still keep people from starving. Mybe even reduce the aid level by 10 percent, just to make sure the internal market remains strong.
Then work to make sure the grain gets to its intended recipients and doesn’t go into the warehouse of some tinhorn warlord.
Sounds like central planning.
Even better would be if the food were bought from the Haitian farmers, that way both the suppliers and the recipients would be better off.
If crops from the US really have to be “dumped” then give them to the food pantries. Or to countries that have suffered so much crop loss that the farmers have nothing to sell.
I remember reading that foreign donors must bribe Haitian officials (?) in order to bring the donations through the ports and distribute them. If that is the case, it is another example of how foreign aid can perpetuate corruption and poverty.
I have said for a long time that we need a new model for humanitarianism. When every country we help remains poor and gets poorer we are doing something wrong.
Most times the Elites who distribute the food skim off the top and then give “aid” to relatives and friends and the poor are not benefitted but farmers and merchants lose money and slowly disappear so there is no longer an economy.
You know most of the foreign aid goes to the Elites and it seems the more we give the more we are hated.
Have relatives who are Rice farmers in Arkansas - we have so much surplus rice, the grain bins are full and there is no where to store it. Last fall at Riceland in Stuttgart, they were dumping the crop outside next to the silos. Has to be a better way to manage the situation.
Probably better that than just dumping grain into the market and flooding out the locals. Kind of removes any market incentive for them to produce.
How can that be if the planet is overpopulated and global famine is coming due to Climate Change. The US alone probably could feed 3/4 of world at this point.
I like your idea. It’s well thought out. Mine was just stream of consciousness typing as things were bouncing around in my head.
Excess food, especially grains, should be converted for long-term storage.
Rice can be stored for 10+ years.
Wheat can be stored for 25+ years.
In war or major natural disaster, food is worth more than gold.
Crop dumping is one of the most pernicious forms of U.S. foreign aid. Crop dumping is the transfer of massive amounts of food into an economy for free or at a below market price to feed “starving children.” The intention is lovely, but the policy carrying out the intention is abhorrent.
Thanks for showing just how the USA welfare racket works...
bingo
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