Date: Sat, 11 Nov 1995 22:23:13 CST
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Subject: This Week in Haiti 13:33 11/08/95
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This Week in Haiti,
American Rice, Inc.
P.O. Box 17253
Washington, D.C. 20041
Tel: 703-478-0822 Fax: 703-478-0335
October 30, 1995
Brooklyn, New York
Neoliberalism in Haiti: The Case of Rice in the October 2
issue, Haiti Progress reprinted an article from the Haitian
Information Bureau which contained many errors both of facts and
opinion. Because rice is so important to the future of their
country, all Haitians deserve complete and accurate reporting on
the issues involved; an accuracy which I am sure the editors of
Haiti Progress always intend to provide. On rice, your readers
may be interested in the following facts:
With these facts in hand, readers of Haiti Progress will be better able to understand the current challenges facing the rice industry in Haiti. Rice Corporation of Haiti S.A., backed by the unique capabilities of American Rice Inc., will continue to guarantee that Haitian consumers always will have the rice they want at the most competitive prices. We also hope soon to be able to include quality rice grown in Haiti.
Lawrence H. TheriotDirector, Corporate Communications
Lawrence Theriot proposes to correct
errors both of facts and
Neoliberalism in Haiti: The Case of Rice, but then
makes few specific refutations.
Mr. Theriot disputes the article's assertion that rice imports
are subject to a trifling 3% tariff by writing that
the total of
customs duties, counselor fees, and withholding taxes paid by RCH
to the Haitian state amounts to 8% of the cost of a sack of
rice. To arrive at 8%, it appears that he simply pads customs
counselor fees and
withholding taxes, which
cannot fairly be considered part of the tariff. Furthermore, even
8% would be less than half the 16.4% tariff which the U.S., the
free trade, places on long-grain semi-milled rice
imports, a tariff which protects American Rice Inc. above all
others. (U.S. rice imports from the Caribbean are duty-free under
the Reagan-launched Caribbean Basin Initiative, or CBI, because
Caribbean rice production is either owned by U.S. multinationals
or no threat to U.S. rice producers.)
Beyond this, Mr. Theriot and RCH propose
that the Haitian State
temporarily exempt all rice imports from customs duty, taxes, and
port charges. Meanwhile, Mr. Theriot is also calling on the
Haitian State to improve the infrastructure -- irrigation, roads,
etc. -- that will facilitate RCH's rice operations. Who is going
to pay for those improvements, Mr. Theriot, if the State collects
no import duties or taxes? Haitian peasants?
Mr. Theriot also contends that RCH's deal-sealing in Sept. 1992
with an illegal government of Haitian putchists did not
technically violate the international embargo because
imports... [were] essential to feeding the Haitian people. He
further points to the
extreme difficulties and the high cost of
operating during the embargo. Does Mr. Theriot really want us to
believe that RCH was motivated by compassion and a sense of
sacrifice in striking its deal with killers? Even the blindest
business opportunities could not have missed the
media extravaganza mounted by the putchists around the signing of
the contract. It was a propaganda boon to a shaky and isolated
coup regime responsible for killing over 5000 Haitians. No, the
deal was not about humanitarian concern. It was about profit.
Mr. Theriot declares that his
rice mill currently is fully
staffed by 200 Haitian managers and workers and that it creates
hundreds of indirect jobs. However, when Haiti Progres
interviewed residents of Laffiteau last May, they said that they
had been promised that the rice mill would create 700 jobs, but
that, by their estimates, about 70 people worked there. They also
were irate that workers at that time were being paid only 25
gourdes a day (equivalent then to about US$1.67), according to
them. (The residents were vehemently opposed to the privatization
of the other state industries in the area, the flour mill and
The Haitian Information Bureau (HIB) noted in the article that
the RCH-provided U.S. agronomists who were
to help improve rice
production in the Artibonite were
not evident and conjectured
RCH will position itself to buy up land as little and big
landowners go broke. Mr. Theriot protests that RCH's technical
assistance to aid Haitian farmers is only being held up by the
Aristide government and that
RCH has never considered or
proposed buying any land in Haiti.
History belies these assertions. We presently can only speculate about the intentions of Erly Industries, which is the parent company of American Rice Inc., in turn the parent of Comet Rice, Inc., in turn the parent of RCH. But an Oct. 27 special report just released by the Washington Office on Haiti (WOH) offers invaluable insights into this multinational's background and practices.
Erly and/or its subsidiaries have been investigated for possible
involvement in money laundering and illegal arms deals, debarred
from government contracts, delisted from the NASDAQ stock
exchange due to precarious fiscal status, and named in an
investigation of illegal lobbying on the part of a former Reagan
official, WOH notes in the report's introduction. In a later
A Troubling History, WOH writes that
companies have been involved in various questionable deals, state
and federal government investigations, near foreclosures, loss of
licenses, and a dizzying series of complex sales and acquisitions
of some Erly companies by other Erly companies, Among the cases
Not only did Comet not warn [the growers] about what was coming, Erly reported a net income of $3.2 million that year -- a sharp increase over the net earnings of $455,000 it reported the year before. One grower said, '[W]hen you realize that the value was obtained by Comet but not returned to the growers, that's why confidence is gone...'
Tainted Trade.According to the Times investigation, Gerald D. Murphy, Erly's Chairman and CEO, set up an
AID-funded rice project in Jordan [which] cornered the lucrative Iraqi market for the exclusive benefit of Comet using a Jordanian company headed by a wealthy international commodities dealer,WOH reports.
According to the series, the project: Did not disclose to AID that the project's goal was to use an obscure U.S. government loan program to give Comet an edge over other U.S. rice companies; Did not disclose to AID that Comet, not the Jordanian front company, was running the project and that no other U.S. rice companies would benefit; Dodged AID's rules about competitive bids, buying plant equipment from a Comet subsidiary; Invested the low-cost project loan at higher interest rates in the U.S., thus increasing Comet's profits; Used 'international government connections, developed at taxpayer expense through a subsidiary's consulting work for AID, to foster its own commercial interests.' (The subsidiary was Chemonics.)
60% of the contraband rice that led to the 'Miami rice wars,'according to the Haitian weekly Libete, WOH writes. Haitian farmers were ruined when they
couldn't compete with the imported rice's price, given U.S. government subsidies and the modern production and marketing methods used by U.S. agribusiness corporations.
The WOH report also details how
Lawrence Theriot was the first
director of the Caribbean Basin Initiative (CBI), serving in that
capacity from 1982 to 1988. In January 1985, the Washington Post
reported that CBI had been promoted with 'almost missionary
zeal'... The 1985 Post article also reveals that Mr. Theriot
even saw opportunity when Duvalier ruled Haiti, just as when the
putchists were in power:
If there is a jewel in CBI's crown,
ironically it is Haiti, the region's poorest country. 'No one was
better prepared to take advantage of CBI,' Theriot said. 'The
Haitian businessman is very sophisticated and professional. The
country has virtually been a free zone since the late' 60s. The
people are nice.'
The WOH report goes into many other aspects of Erly Industries'
history and role in Haiti and the world, as well as offering
useful analysis of and alternatives to the nefarious effects of
so-called free-trade and structural adjustment policies on the
world's poor. As the WOH notes, the RCH and other
projects -- wrapped in development rhetoric about creating jobs,
ensuring an affordable food supply, and improving agricultural
production -- raise key questions, not only for the Haitian poor
but also for the U.S. citizen whose tax dollar usually funds
enterprises which richly benefit powerful U.S.
corporations while further disempowering the peasant majority.
The report closes by formulating some of these questions:
Given the way Comet treated California growers it had done
business with for decades, how can Haitian peasants expect to be
RCH's contract specifies that the price it pays for rice will
fluctuate to reflect changes in the exchange rate. Do the wages
it pays also fluctuate to reflect such changes?
Are the fertilizers, pesticides and other chemicals RCH will use
toxic to people and/or the environment? Are they purchased from
another Erly company? Are they purchased with U.S. tax dollars?
Will genetically engineered plants be introduced? In 1994, the
Union of Concerned Scientists reported that very little is known
about the potential risks of transgenic crops. For example,
scientists have found that genetically engineering plants to
resist existing viruses may actually stimulate the evolution of
Will a credit system be offered to -- or imposed on -- Haitian
rice growers with very easy terms at first, later followed by
stiff interest rates, contract penalties, or other changes which
will put them out of business?
How much will RCH's activities benefit Erly versus how much they
benefit Haiti? Will foreign-owned agribusiness replace the small
farming family, the peasant cooperative?
Have other Erly programs proven of benefit to the poor in Third
World countries? How does buying rice from one poor country and
selling it to another benefit either one?
Were the legal and ethical irregularities associated with Erly
company projects in the past -- e.g., the Jordan
the 1991 sellout of California growers -- a series of unfortunate
coincidences, or an established pattern which should raise
serious concerns about operations in Haiti?
Will the effects of this project be harmful to the Haitian poor,
like the floods of donated rice were harmful and the swine
eradication program was harmful?
As Mr. Theriot says:
Because rice is so important to the future
of their country, all Haitians deserve complete and accurate
reporting on the issues involved. We think the questions above
provide an framework for future investigation, and we look
forward to the results.