HOWMAR said:It seems to me that most Dominicans would rather eliminate tariffs and pay 12 pesos/pound for imported rice than 20 pesos/pound for domestic rice. Even if that closes the Dominicn rice industry. I guess I haven't met too many rice farmers here on the North Coast or in the cities.
So you would rather continue "unfairtrade" of adding a 40% tariff to imported rice to avoid the possibility of price dumping? Granted Dominican rice producers either have to learn to compete or change their crop. If and when prices rise due to market conditions, they will have to readapt. For example. I can't understand how a melon can cost twice as much in the DR than in the northern US. There is obviously an unmet market right here driving up the price.Chris said:What goods Scandall and with what money?
What I would like to see, is that our fearless leaders take this 'opportunity' and turn it into an opportunity. We talked in Environment about marketing the DR's organic produce for an example. The last think I want, is to become a dumping ground for products.
I think the idea should be to earn money for the DR with exportation of DR goods equal to what comes in from other places, and not to flood the place with consumer goods that most people cannot afford. While we're talking about rice (this goes for many other products...), if we're flooded with cheaper foodstuffs, can we be sure that it will be fair trade foodstuffs... I can see an opportunity in the making for the unscrupulous... Buy for example rice at 12pesos and sell here at 15pesos... Sounds good, and looks like a saving for the Dominican housewife, only if you don't know that the first price put a few farmers out of business and the 2nd price is there simply to drive a few Dominican farmer's out of business, in order to buy marketshare.
They were prosperous as long as there was a 40% inport tariff on imported rice. The Haitian market fell apart once that tariff was reduced to 3%.Chirimoya said:Until a few years ago, the Aritibonite rice-growing region was relatively prosperous, and people from that area rarely migrated to the cities or the DR. Now there is a mass exodus because it's not worth growing rice anymore.
The DR rice and chicken industry are likely to suffer the same fate as those in Haiti.
Now tell me who are the winners and losers here?
Chirimoya said:In Haiti, many of the 'cheaper' imported goods ended up going up to their old prices. The local importers and/or retailers decided that the consumer was used to paying the old price anyway.
Simply the Law of Supply and Demand. If in fact prices do rise (or fail to fall), then Dominican producers can try to compete. Which will have the result in higher supply yielding lower prices in the longrun. The system of artificial price controls just doesn't work, as evidensed by the failure every Socialistic economy (excluding some oil producers). Do you think that General Motors would ever solve its present financial difficulties if the US government were to say we will tariff every import so that you can raise the price of your automobiles 40%? Downsizing, retooling and efficiency is the only longterm solution.Chirimoya said:The Haitian consumers were not winners. Does the first paragraph of my post not show up on your screen? I notice you didn't include it in your quote.
Maybe the DR retailers will be more ethical.:tired:
HOWMAR said:So you would rather continue "unfairtrade" of adding a 40% tariff to imported rice to avoid the possibility of price dumping?
HOWMAR said:Granted Dominican rice producers either have to learn to compete or change their crop. If and when prices rise due to market conditions, they will have to readapt.
HOWMAR said:For example. I can't understand how a melon can cost twice as much in the DR than in the northern US. There is obviously an unmet market right here driving up the price.
Very true, but, the Dominican economy has the ability to support a market for a product if it is a competitive product. Why do Dominican farmers continue to plant a crop that has to be protected from competition. Because it has that protection. These farmers are not poor share-croppers for the most part. If they had to alter their crops to compete. so be it. How anybody can justify planting a crop year after year that requires price supports, while at the same time there are crops where the demand isn't being met baffles me. When the supermercado owner tells me that he can't get products such as melons or bananas due to shortages, year after year, you have to wonder. The Dominican farmer would rather continue producing an uncompetitive crop with artificial pricesupports than adapt to the true market.Chirimoya said:Chris has already said it, but what happened in Haiti is that it wasn't until the Artibonite rice producers were well and truly consigned to history, that the prices went up again.
By this time, the Haitian farmers were in no position to compete. Rural prosperity in Haitian terms is very relative. There are no safety nets for farmers as in stronger economies. No credit, no welfare, no nothing. You swim or you sink. A couple of months without income is not something you can recover from. You leave your fields, head for the shanty towns of Port-au-Prince or the building sites of Santo Domingo if you are to have any hope of surviving and keeping your family alive.
Granted, the Haitian example is extreme, because it takes place in the ultimate fragile economy. At least the DR has a little more power, but not much. Within the DR, we can be sure that it is not the interests of the weakest that will be put first.
HOWMAR said:Very true, but, the Dominican economy has the ability to support a market for a product if it is a competitive product. Why do Dominican farmers continue to plant a crop that has to be protected from competition. Because it has that protection. These farmers are not poor share-croppers for the most part. If they had to alter their crops to compete. so be it. How anybody can justify planting a crop year after year that requires price supports, while at the same time there are crops where the demand isn't being met baffles me. When the supermercado owner tells me that he can't get products such as melons or bananas due to shortages, year after year, you have to wonder. The Dominican farmer would rather continue producing an uncompetitive crop with artificial pricesupports than adapt to the true market.
True, but why shouldn't the Dominican consumer benefit from the American subsidy to the American farmer. Should I as a Dominican consumer feel some sort of duty to support the Dominican farmer and pay higher prices? I'm sure most Dominican consumers would rather put their pesos to other use, rather than help keep the inefficient farmers in business.bob saunders said:This holds true for American farmers, they are heavily supported with taxpayer's money, and still will be after DR-CAFTA. It would be very difficult for DR Farmers to compete with American farmers on an even playingfield, and will be even harder after DR-CAFTA, when the tariffs are gone but the subsidized Anmerican farm products are given free access.
HOWMAR said:Very true, but, the Dominican economy has the ability to support a market for a product if it is a competitive product. Why do Dominican farmers continue to plant a crop that has to be protected from competition. Because it has that protection. These farmers are not poor share-croppers for the most part. If they had to alter their crops to compete. so be it. How anybody can justify planting a crop year after year that requires price supports, while at the same time there are crops where the demand isn't being met baffles me.
HOWMAR said:When the supermercado owner tells me that he can't get products such as melons or bananas due to shortages, year after year, you have to wonder. The Dominican farmer would rather continue producing an uncompetitive crop with artificial pricesupports than adapt to the true market.
In spite of everything the DR has three great advantages. A 12 month growing season, matched by very few US states. An abundant and cheap labor force. Even more abundant and cheaper if Haitian labor is employed. And large areas of underutilized land in the interior. Certainly cheaper than US farm land.Chris said:Yes, it does not seem reasonable. But we must remember that this whole globalization thing in its current form, is not so very old. People who do business and farmers are perhaps used to looking at their competition on the next corner or the next rice mill or the next chicken processor and not perhaps at the global competition that becomes a reality with free trade agreements. It must be crazily confusing if one is suddenly dumped into a world market that one simply does not understand and never had to think about. And again, we are a small economy. To change acres of land into another crop takes money, skill, vision and the ability to find a market for the crop. To grow a crop economically against other subsidised crops takes some doing.
Riceland cannot be changed into melon or banana land overnight. Bananas are mostly exported - Unless you have a tree in your backyard or travel to road stalls, there is nary a banana to be seen in the supermercados. And if there was, would the average Dominican consumer pay the price that it takes to grow the fruit for the local market? And in the quantity necessary to get into the black on the balance sheet?
This is where the large economies have an advantage. They have the luxury of a lot of research possible on new crops, a lot of 'agricultural extension offices' from universities and a lot of money to put into new development, and most of all a lot of money to create their market. Farmers/Food Producers from developed economies are usually very heavily subsidised. There is no way that a country like the Dominican Republic can compete with a subsidised 1st world market. It is simply not possible. Nals had a post recently where he was talking about 'economies of scale'. I don't know if I agreed with his premise in that thread, but in growing, the economies of scale do not exist for us to compete, unless we plant hundreds of acres of one product and create and nurture our market. We can however feed ourselves quite handsomely.
I say again, there simply has to be opportunities with DR-Cafta, even in farming/agriculture. That is where I hope the DR Leaders will go to Florida as the Florida leaders are doing, and investigate with open eyes. See what they are short of and when - and make some plans. As we've seen, it is easy to sign an agreement. It is another kettle of fish to implement it.
We seem to ignore the fact that Haiti was the poorest country in the hemisphere 40 years ago, and still is. Free trade wasn't its problem.joel pacheco said:"Free trade" has proven to be a disaster for many countries, even the United States.
It simple logic to argue that flooding the market with cheap products will bring down overall prices in order to compete, thus making goods cheaper for the average consumer.Some people seem to miss the larger picture.
One can look at what "Free trade" has done to Haiti. A nation that in 1986 could virtually feed itself is now facing agricultural disaster. The poultry industry is wrecked, and the average farmer can barely survive. Those farmers that abandon the land and end up in Haiti's cities looking for factory work find themselves jobless. "Free trade" has caused Haiti to lose half of its textile industry jobs in the last few years. Haiti is now dependent on food imports to feed itself. Poverty is becoming worse. One need only to look outside his door in the DR to see the Haitians roaming the streets looking for work. Refugees of free trade.
Where I live in North Carolina, the textile industry is almost gone. The last 5 years alone has been devastating. Thanks to free trade. In 1994 America had a 5 billion dollar trade surplus with Mexico. Today America is tens of Billions in the hole with Mexico. The reason? NAFTA.
The new jobs that were supposed to replace textiles and other manufacturing jobs , like, let say computers, are being outsourced to India.
I have never supported free trade. I've never seen the benefit in it for the average worker in America. Or anywhere. The factory workers in China that have taken the once well paying manufacting jobs of America are working for slave wages, treated like convict laborers.
Who benefits from "free trade"? The corporate CEO's, a few other big wheels, not the average citizen.
I can't see the benefits of Nafta,WTO, all the rest of it. It seems like a great way to spread poverty and wreck human lives, not much else.
Sure, WAL-MART sells microwave ovens and refrigerators on the cheap, but what benefit is that to an American who is jobless, or working for minimum wage because the Amana appliance factory closed and set new plants in Mexico and China?
I think it is the responsibility of a nation's government to look out for the well being of its citizens. Even Trujillo and Papa Doc were smart enough to protect there domestic markets in order to provide decent jobs for their citizens.
I guess we will all be able to enjoy the benefits of "free trade" in 3 or 4 years when the DR's agricutural industry has been reduced to levels approaching that of the Haitians...
HOWMAR said:We seem to ignore the fact that Haiti was the poorest country in the hemisphere 40 years ago, and still is. Free trade wasn't its problem.