Root Cause Problms/Agricultural tariff overview 10

Lionne - April 24 2008, 6:58 PM

As explained above, Haiti's tariff levels have been substantially reduced and a simplified tariff
structure set up. All quantitative restrictions on agricultural imports have been lifted.

As a
result, agricultural tariffs are now very low, despite having the highest tariff protection.

The
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simple average tariff in agriculture is 4.5 per cent, with rates ranging from 0 to 15 per cent in
line with the tariff headings applied.

However, before 1995, most agricultural products had
tariffs applied in the range of 45-50 per cent, leading to dramatic reductions, such as:
rice and sugar: from 50 to three per cent·
maize: from 50 to 15 per cent·
wheat:
from
50
to
0
per
cent·
pork and chicken: from 40 to five per cent.
44
As part of its commitments under the WTO, Haiti has bound import duties on agricultural
products.

This means that tariffs are subject to a maximum.

The applied rates explained
above can be raised but not beyond the `bound tariff' level.

Going beyond the bound tariff
ceiling would contravene WTO rules and Haiti would risk countervailing duties being applied
by trading partners.

In agriculture, tariffs have been bound at rates ranging from 0 to 50 per
cent.

Maize, rice, millet, sorghum and other products of the milling industry are all bound at 50
per cent. For these products ­ although the applied tariff rates are very low (between 0 and 15
per cent) ­ it would not actually be against WTO rules to raise the tariffs from their current low
levels.

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From the perspective of poor farmers, the lowering of certain tariffs will have had a particularly
negative impact.

Where unrestrained imports compete with local production, prices on local
markets will fall. In cases where import volumes are high and prices are low, this may also
change local consumption patterns away from traditional foodstuffs supplied by local farmers.

In this section we will look at products that have suffered the most serious import competition
as a result of tariff reduction, resulting in negative effects on the poor ­ including rice, sugar,
and livestock, particularly chicken and pork.

When agricultural liberalisation occurs, tariffs are not the only things to be lowered.

There are
often complementary changes in the way in which the sector is managed and supported ­
agricultural subsidies and price controls can be withdrawn, and state enterprises, such as
commodity marketing boards, can be privatised or dismantled.

In Haiti there was very little support and intervention in the sector to begin with. Apart from
lowering tariffs, the only other significant change was lowering subsidies for fertiliser, resulting
in a rise of 133 per cent in the price of fertiliser between 1993 and 2000.
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This rise occurred
in the context of prices paid to farmers falling due to increased competition from imports.

Given the very limited support the agricultural sector receives, the negative effects of
liberalisation described below are almost entirely the result of tariff cuts.
Rice

The most emblematic case of negative impacts from agricultural liberalisation in Haiti is
considered to be in the rice sector.

This sector has been the subject of a detailed study by
Oxfam.

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Christian Aid has also previously documented the losses suffered by rice farmers in
the Artibonite valley, where around 80 per cent of Haitian rice is produced.

48
After tariffs on
rice were reduced to three per cent in 1995, rice imports rose sharply, from around 15,000
tonnes at the beginning of the 1980s to 350,000 tonnes in 2004.
49
This represents a rise of
more than 2,200 per cent. The rise in imports has been accompanied by a fall in rice prices on
the local market, as the price of local rice is now determined by the price of imported rice.

All of this has had a dramatic impact on local rice production.

According to Oxfam, rice
production in Haiti was around 124,000 tonnes in 1981; the CNSA reported national
production in 2002 to be 72,800 tonnes.

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This represents a fall of 41 per cent.

According to a 1997 FAO survey, around 93,000 families in Haiti depend on local rice
production, 52,000 of whom are rice farmers.

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The price deterioration has had a significant
impact on their income and livelihoods.

Taking into account inflation and the rise in the cost of
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living, a rice producer would have had to sell four times as much rice in 2001 to buy the same
quantity of non-food items as in 1981.

According to Oxfam, rice-growing areas now have some of the highest concentrations of
malnutrition and poverty, with 50 per cent of children in the Artibonite, the main rice-growing
region, documented as suffering from malnutrition.

Christian Aid interviewed farmers in 2001,
finding similar stories of suffering.

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One farmer, Muracin Claircin from Desarme, risked his life
attempting to migrate on a boat to the US. While Muracin's attempt failed and he was lucky
enough to make it back to Haiti, Christian Aid interviewed other local farmers who told of
family members and friends who had drowned while trying to cross to the US. Another
interviewee talked of his plans to leave the valley and to go to the Dominican Republic.

All of
those Christian Aid talked to spoke of increasing imports saturating the local market, falling
prices and being unable to make a profit from their rice.

The increase in rice imports has also affected local consumption patterns.

While a Haitian
might have previously consumed 25kg of rice a year, this has now increased to 45kg. This
means that other locally grown foods, such as maize or sorghum, are losing market share.

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