Amid all the debate about what's driven spiraling food prices, one piece of history keeps getting left off the table: the key role institutions like the IMF have played in exacerbating the situation. Which is why William Quigley's work to document the contours of Haiti's food crisis deserves a closer look. Last month, starving Haitians ousted the country's prime minister after riots that left at least six dead. At the heart of this tension and history? Rice.
As a small country of just 8 million, prior to Duvalier's expulsion, Haiti grew almost all of its own rice. That changed after 1986, the year Duvalier fled into exile, and Haiti secured a desperately needed $24.6-million loan from the IMF--a loan given on the condition that Haiti cut its rice tariffs, which the country did. Tariffs shrank from 35% to just 3%.
Soon thereafter, not unexpectedly, the Haitian market was promptly flooded with cheap American rice. Unable to compete with American rice farmers -- who receive an annual $1-billion subsidy -- as Paul Farmer remembers, the local rice market disintegrated, to the point that today, Haiti has become the third-largest importer of U.S. rice. And now, with the cost of rice rising over 140% since January, Haitians can't afford it any longer.
It's a painful irony that these days, Robert Zoellick is the one now making high-minded calls for global food aid and reform from his new perch at the World Bank. After all, it was Zoellick who, during his prior stint as U.S. trade representative, was part of the team that aggressively worked to limit developing countries' ability to shore up protective grain reserves, mount tariffs and subsidize farmers -- all in the name of the free market. And all while simultaneously defending egregious U.S. subsidies, like Bush's decision to expand 2002 farm-bill spending by $80 billion.
Yes, countries like U.S. need to step up food aid. But if crisis is opportunity, right now, it can't be forgotten that what countries like Haiti really need is a better deal on trade policy, too.
--Te-Ping Chen
