A Tremor for Haiti's Aid Industry

The earthquake was only the latest disaster to capsize the country's already fragile local aid economy. Now outside organizations are threatening to overwhelm it entirely.

BY POOJA BHATIA | JUNE 30, 2010

The saga started in 2007, the same year that the aid agencies declared RUTFs the best-available treatment for severe acute malnutrition. Later that year, the consortium established a food-safety audit process and charged Doctors Without Borders and UNICEF with inspecting manufacturers who wanted to supply the stuff. By then, MFK had been making Medika Mamba in Haiti for four years, and it asked UNICEF for an audit.

According to MFK, UNICEF dithered and finally pawned the audit off to Doctors Without Borders at the end of 2008. In the middle of the audit, Doctors Without Borders changed tack, creating a new committee for food-safety inspections; shortly after, the organization's auditor left his position. Unaudited, MFK could not bid on most RUTF contracts, but it continued to supply Medika Mamba to non-consortium agencies, including Catholic Relief Services and World Vision. Then late last year, MFK finally got a seal of approval from Supply Chain Management System, a contractor for the U.S. Agency for International Development, though Doctors Without Borders and UNICEF still didn't recognize the audit.

UNICEF spokesperson Edward Carwardine said in an interview that, while Medika Mamba met quality requirements, UNICEF prefers single-dose sachets to larger bags. Another UNICEF spokesperson told me that the organization had found a sample of Medika Mamba to be poor quality because the oil separates from the paste, like all organic peanut butter. But neither a packaging requirement nor an emulsification requirement is outlined in any published standard. And in fact, some Plumpy'nut comes in multidose servings, which some nutritionists prefer because mothers are less likely to resell it in that form. MFK says UNICEF did not inform it of the emulsification complaint.

A former advisor in UNICEF's supply division, Stephen Jarrett, said via email that UNICEF doesn't inspect RUTF facilities from which it has no intention of procuring. And after the earthquake there was nearly enough Plumpy'nut to satisfy demand; private entities like the Clinton Foundation donated more in the weeks that followed.

Whatever the rationale for not auditing MFK, the result was clear -- MFK became yet another Haitian producer unable to compete in the aid market. It's a contest that, to Haitian producers, often seems rigged: Aid agencies are accustomed to big global suppliers; imports are often cheaper (in some cases because they're subsidized or donated); and exporters encounter none of the headaches of production that occur in Haiti daily.

In recent years, local production has become a pressing matter. The issue ignited after the April 2008 food riots, when President René Préval decried Haiti's vulnerability to global commodity price swings; his reluctance to subsidize the price of imported rice contributed to his government's downfall. After January's earthquake, politicians reiterated the call for national production, with Préval halting food aid in the tent cities. Eighty percent of rice consumed in Haiti is imported, whether as aid or trade, and, according to the government, the country spends most of its foreign exchange on food. That foreign food pushes market prices down. As a result, the 50 percent of Haitians who subsist on agriculture are priced out of the market, condemned to the paltriest subsistence farming imaginable.

If aid groups were to buy locally, it would be a good start. Of course, that's not to say that it would be easy. The World Food Program had boosted its purchases of local rice and other foodstuffs before the earthquake and continues to do so. But Haiti's inefficiencies are never far from view: Haitian rice costs more than Pakistani rice, for example, so the World Food Program must get special clearance to contract with a bidder whose price is not the lowest. So far, it has been able to buy only 1 percent of its rice locally.

MFK's way around this problem has eventually come, at last. It will soon become a part of Nutriset, which will in turn shut down its Dominican factory. MFK founder and director Patricia Wolff says one of the major advantages of joining Nutriset is the credibility it gives MFK with UNICEF, the biggest potential buyer. The MFK facility will probably be audited at last and will be thus able to compete for the kind of large contracts that would make it sustainable. "Our idea was to build a model that was replicable," Wolff told me. "But humanitarian international buyers have never bought from the national producers. So maybe, the lesson is, it's not sustainable."

ROBERTO SCHMIDT/AFP/Getty Images

 

Pooja Bhatia is a journalist based in Port-au-Prince, Haiti.

KB

11:40 AM ET

July 1, 2010

While I think Bhatia makes

While I think Bhatia makes great points, there are some problems I see in this article:

1. She finds that among other problems, small landowners, lack of tractors and use of pickaxes and hoes are responsible for the fact that Haitian peanuts cost five times as much as American peanuts. This omits the elephant in the room (probably *the* main factor for the price discrepancy): gigantic government subsidies to US agribusiness that artificially decrease the price of US peanuts. This is an essential point that goes unmentioned. Also, as a general trend, productivity has been shown to *decrease* with an increased size of farms in many countries, under a host of diverse conditions. Keep in mind that ancient farming techniques, bad roads, lack of education, electricity and potable water afflict many rural zones of neighboring Dominican Republic (admittedly to a lesser level of severity or prevalence), but thanks to state agricultural policies (like price guarantees and tariffs), Dominican staples like beans and rice are found all over the country and these Dominican peasants eke out a better livelihood than their Haitian counterparts.

2. Bhatia notes that "[e]ighty percent of rice consumed in Haiti is imported, whether as aid or trade" but again attributes this to inefficiency: "Haiti's inefficiencies are never far from view: Haitian rice costs more than Pakistani rice." This is another superficial comparison, as Pakistan also provides strong state support for rice production. It would have been helpful to note that up until the mid-1980s, almost all rice consumed within Haiti was Haitian. This enormous transformation was not due to inefficiency, but because of very explicit political choices made by the World Bank, IMF and USAID (see Clinton's public apology at the Senate Foreign Relations Committee). The article could have mentioned CEPR's terrific policy proposal of buying up Haiti's next rice crops to stimulate domestic production as a possible solution.

3. I was confused by her point that Preval's "reluctance to subsidize the price of imported rice contributed to his government's downfall." What downfall does she mean? Would the reluctance have led to his downfall if Fanmi Lavalas hadn't been banned under dubious, technical grounds from participating in the election? Hasn't he been in office this whole time?

 

RSAFSOZ

4:53 PM ET

July 2, 2010

bad chances

haiti lives bad chances.

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BEAUTYGIRL

10:34 PM ET

July 7, 2010

What's surprising here is

What's surprising here is that it's not just the local farmers, but local industry that the aid agencies are sidelining. It is funny that UNICEF and DWB of all organizations, would sideline local industry, even if by the means of a bureaucratic messup.
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GREGCART08

7:33 PM ET

July 20, 2010

If they continue to get

If they continue to get something out of help, it is really impossible for them to have a stable economy. Who amongst them will support their local product? Imagine how many taxes from these commodities are eliminated because of these help.Greg Cart

 

PETEFROST5

2:55 AM ET

July 27, 2010

It is a good deed to help

It is a good deed to help other people. However, you need to make sure that this won't affect them and their attitude in a long run. How could it be possible for them to have a great life on their own if they become more independent to those people who help them.Pete Frost