Monday, February 16, 2009

DR-CAFTA


When people in the US ask me about the farm, the questions are usually: how? when? why? where? and have you made any money yet?

On this last trip to the DR I met a group of Peace Corps Volunteers (PCV) in the Capital at the usual Pension that I stayed in as a PCV. Usually I can answer the questions that people ask me in the states. A PCV asked me the implications of DR-CAFTA on coffee. "To be honest, I'm not really sure," was my answer. So I have started to do some research on the issue. [The picture is of Antonio and his 500lbs of garlic and a little bit of beans in the lower left] I came across this:

The four Central American countries being discussed are primarily agricultural countries that have raised particular products for import into the United States. Traditionally these have been “dessert” foods: bananas, coffee, sugar, but have also included cotton and beef. More recently, they include niche items, from flowers to snow peas. Two years after passage of the Central American Free Trade Agreement (DR-CAFTA—the Dominican Republic also signed on), the treaty’s promises of development have not been realized in any of four countries. Frequently a lack of infrastructure prevents the rural farmer from being able to participate in international trade. For example, in Nicaragua only 10% of the roads are paved. While electricity doubles the farmers’ productive capacity, only half of Nicaragua has electricity. Another disadvantage for the Nicaraguan farmer is the inability to complete the paperwork and buy the licenses necessary to carry out trade across borders.

Just as DR-CAFTA was implemented the cost of inputs increased dramatically, while the price of the agricultural product did not. Between January 2006 and March 2008, food prices rose 68%, the price of rice doubled, corn rose 128% and wheat rose 168%. Most small- and medium-sized Central American farmers were unable to obtain credit. On the other hand, U.S. agriculture was able to move into these countries’ markets with corn, rice, meat, wheat and dairy products, thus undermining local production. Employment did not expand, although the larger foreign corporations did employ more people; generally these workers came from rural and urban areas where farms and business were unable to make a living. Thus jobs may be created, but they are frequently low paying. Migration out of each country hasn’t been halted either.

Intellectual property under DR-CAFTA extended any U.S. patent on drugs for twenty years, thus staving off a country’s ability to produce generic drugs. Lastly, DR-CAFTA has opened the door to foreign-owned companies setting up megaprojects such as large-scale mining and hydroelectric dams. Most often these lead to kicking people, particularly indigenous communities, off their land or threatening to poison the water, air and land surrounding their farms.

From: http://internationalviewpoint.org/spip.php?article1612

I didn't quote the above to be inflammatory. I just wanted to share economic numbers that support my assumption on DR-CAFTA. -That small scale farmers with no level of automation can not compete in a free market. Furthermore, it makes no sense to me that it is helpful on a global economic scale to discourage local food production.

The best example for me are the bananas on my farm. Half of them usually rot. Sell bananas, make money; it sounds so simple. I have tried to find a market for them to no avail. The cost to get them to market, not including cost of production, does not pay its own costs. My farm is a 45min walk from the road, so a load of bananas needs to be loaded on the back of a mule and sent to the road before it is loaded on a truck for two hours to San Juan where it would be sold. In San Juan people pay up to 3 pesos per banana; in Los Frios there are plenty of them and no one is willing to pay for them. I don't own any vehicles in the DR (no trucks, no motorbikes, not even a mule), so I'm at the mercy of other truck owners and intermediaries to get my product to market. If I have a viable product IN Los Frios and can't sell it, what economic scale allows US produced beans, milk, and rice to be sold in the DR?

This system of free trade does force efficiency into econmic systems, which is a good thing. I guess the reality is that all the farmers producing products included in the DR-CAFTA that are also produced in the US need to change their crops, which is about as easy as selling bananas in Los Frios.



Saturday, February 7, 2009

Serious Coffee


Amado Martinez, Coffee Farmer, Miembro de Nulcio de Cafecultores de Monte Bonito, Dominican Republic. His farm has about 50/50 Typico and Caturra varietals and sits at an elevation of 1150 meters, which has been organic for the last 8 years.

I have known Amado since 2003 when we would be invited to the same meetings for the Fundacion Sur Futuro. He was always a vocal member of the community and speaks with such sincerity you know he is speaking the truth. Next week I will get to cup his coffee for the first time!