Rice Corporation of Haiti (RCH)

Special Issue Report, [1 November 1995]

Washington Office on Haiti (WOH) has just released a SPECIAL ISSUE REPORT about the U.S.-owned Rice Corporation of Haiti, whose parent company has a virtual monopoly on rice imports.

Rice Corporation of Haiti (RCH) began operations when Marc Bazin's coup regime signed a 9-year contract in September 1992. RCH's corporate parent, a powerful U.S. agribusiness giant with headquarters in Houston and Los Angeles, has a history of what the New York Times called tainted trade.

As Haiti confronts extraordinary pressures from USAID, the World Bank, IDB and IMF to reform its economy through structural adjustments, RCH provides a timely example of the kind of project which U.S. corporations are encouraged -- and often funded -- to conduct under the banners of privatization, democracy enhancement and humanitarian assistance.

Such 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 often funds free market enterprises which richly benefit powerful U.S. corporations while further disempowering the peasant majority.

• Much of the Miami rice which ravaged Haitian rice production in the 1980s was imported by RCH's parent company, Comet Rice. Comet has been the largest importer of rice in Haiti for many years. The floods of imported rice in the 1980s drove thousands of small rice farmers out of business. This so-called food security actually increased poverty and hunger as displaced peasants streamed into the city in search of work. Foreign-owned assembly industries thrived on a work force kept desperate by an 80% unemployment rate.
• Both RCH and Comet Rice are owned by Erly, Inc., an international agribusiness and consulting conglomerate with a history of repeated legal irregularities and close ties to political power circles. Among other things, 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.
• RCH has been operating in Haiti for 3 years now under an agreement signed by coup leaders in September 1992. According to a recent AID study, RCH currently imports about half the rice consumed in Haiti and has a virtual monopoly on importing rice. RCH's supposed purposes were to improve Haiti's rice production, create jobs, and assure an ample supply of affordable rice to consumers.
  • Has rice production increased during this 3 years, or has more rice been imported?
  • How many jobs have been created? How many pay even minimum wage? Are fewer people hungry?
  • Have rice prices gone down or up? Do the wages RCH pays also fluctuate to reflect changes in the exchange rate, as its contract stipulates the ceiling price it sells rice for will change?
• How much of RCH's activity -- either directly or through its chain of corporate parents and siblings -- has been funded by U.S. tax dollars? Various Erly company activities have been subsidized by AID, USDA and possibly other publicly funded agencies. Projects like RCH are typically championed as promoting the privatization and free trade needed to develop Third World economies. Since the U.S. agribusiness system is enormously subsidized by the taxpayer, it does not itself constitute either free trade or privatized industry.

AID chief Brian Atwood said in 1994 Senate hearings that 60% of AID dollars go directly to U.S. businesss. A Washington Post columnist (Oct. 27, 1995) estimated that fully 80% of AID dollars go to U.S. corporations and experts.

When asked for the total grants, contracts, subsidies or other AID monies received by any Erly company -- RCH, Comet Rice, American Rice or Chemonics -- between 1980 and 1995, an AID spokesman reported that the AID mission in Haiti maintains that no Erly company has received AID funding in Haiti except for contracts under a coffee revitalization project and the agriculture PLUS project. In early 1993, however, a Chemonics employee spoke of managing all our projects in Haiti for years except for the rice project (RCH). That project, he said, was managed by an Erly representative working out of his home in Northern Virginia.

RCH is managed by the former director of the Caribbean Basin Initiative (1982-1988) and maintains an office in Port-au-Prince, a house in Petionville, and a facility in Laffiteau, 23 km north of Port-au-Prince.

A few of the questions raised in the SPECIAL ISSUE REPORT include:

• 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?
• 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?
• 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?
• 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 new viruses.
• Were the legal and ethical irregularities associated with Erly company projects in the past -- e.g., the Jordan project and 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?