Agriculture in the DR -bleak future

[Onions/Carrots]

I see a bleak future for Dominican Agriculture. I have yet to speak to a small to medium sized farmer who has told me that they have had more winning years than losing ones in the past decade. When they do win, they are so indebted to their losing years, that what is left allows for a subsistence lifestyle. It's a miracle that they continue to engage in such a losing business year after year.

At times I feel the DR farmer is a junkie addicted to the idea that eventually his crop will cash out. Being of a farm family, its funny to talk to these farmers and hear them state how next term's crop (some are short- semester long or annual) will be the big payoff. How they are going to make 300, 400, 500,000 pesos to millions of pesos at the big payoff (harvest time) and how they will be on easy street only to be let down at the numerous "monkey wrenches" which agriculture encounters.

Banco Agricola is another enigma. Farmers seek out this "dealer" of funds only to be let down year after year. Many times they don't get the funds, when they do they usually FAIL! It's more of a political institution than a viable business given the record rate of failed harvests in the DR year after year. At times I feel that the entire agriculture business in the DR along with its financiers (Banco Agricola, Banco Del Progreso, Land-Lease operators, etc) are all part of an intricate Ponzi scheme.

Production does not compensate for losses. All of this talk of hardworking haitians is bally-hoo. Many are becoming dominicanized- lazy and fervent complainers about wages, conditions, etc. Machinery is constantly breaking down. Repairs are extremely expensive. The land is being overworked.

Is it the end of the small to med sized DR farmer? Maybe the DR should shut down this enterprise as they did the sugar industry. I for one say YES!

[Chip]

Peas and carrots - as a whole Dominicans will tell you things are bad and yet every time you see them they typically look fatter and have new clothes, go figure.

[Hillbilly]

I wish I could contradict your post O&C, but I cannot.

I think rice farming will become a thing of the past withing a few years, since there is no way that DR farmers can compete with farmers from Central America (in Costa Rica there are rice farms that are over 50,000 tareas???), much less US farmers where it takes 15 minutes per tarea to harvest a crop!! (And that is OLD data!!).

As I have found, all farmers in the DR have similar problems, and most of these problems revolve around (a) Cost of modernizing: machinery; (b) Cost of operation: direct costs for diesel fuel, fertilizers, chemicals; (c) taxes and tariffs.

We will have another 65,000 unemployed from the farm sector in 2008, but the government will announce the creation of 100,000 new jobs in the technology sector...hehehe


HB

[Onions/Carrots]

HB, well then to those who want the Haitian field hands to disappear, there you have it.

Hey Chip, is that tasty?

[NALs]

Originally Posted by Hillbilly

I wish I could contradict your post O&C, but I cannot.

I think rice farming will become a thing of the past withing a few years, since there is no way that DR farmers can compete with farmers from Central America (in Costa Rica there are rice farms that are over 50,000 tareas???), much less US farmers where it takes 15 minutes per tarea to harvest a crop!! (And that is OLD data!!).

HB

Hm, maybe, but Dominican rice farmers produce more than the Costa Ricans. By more, I mean 245,000 tonnes more than Costa Rica, with the yield being greater in the DR than in CR by 0.31. In other words, Dominican rice farmers are more productive than Costa Rican rice farmers in yields and total production.

Judging by yield of tonnes per hectare, the DR is the second most productive country in rice production in the entire Central American/Caribbean region. Only El Salvador has a higher yield and Costa Rica is in fourth place with Mexico taking up the third position; all of this according to the data.

Dominican farmers are competing with farmers from Central America and the DR is ahead of all of them except El Salvador when it comes to yield, and ahead all of them when it comes to total production, according to the figures.

The DR also has the most amount of land devoted to rice production, Cuba devotes almost as much land as the DR to rice production and yet, it produces less than the DR.

There are still much potential in the DR as far as rice is concerned. According to the article:

"The Dominican Republic is the largest producer in the [Central American and Caribbean] area with an annual production of approximately 540 000 tonnes. Yields are also respectable (approx. 4.7 t/ha), but the country is frequently a net importer of rice. All production in the Dominican Republic is irrigated and yields may easily be increased far above current levels."

Figures are from the beginning of this decade, here is the source:

Source

-NALs

[NALs]

Originally Posted by Onions/Carrots

HB, well then to those who want the Haitian field hands to disappear, there you have it.

Hey Chip, is that tasty?

They are not going to disappear, but rather move to other sectors.

-NALs

[PICHARDO]

Some info you need to know:
In the DR most rice producers are linked via "Cooperatives" where they get the best information regarding insects and ills that affect the crops early on, something like the AWACS of agriculture. In that aspect, important data that affects the crops are commonly addressed before they spread from one sector to others. They help each others with seeds and preparation of soil.

Not too long ago (well... Yes!) Some Israelis experts on the field of agriculture and aviculture visited the DR and demonstrated to the cooperatives new and innovating ways to get the best results and recycling of the soil by alternating certain crops.
It seems that the instructions were employed rather successfully in all areas that it was contributed to.

You must keep in mind that the DR exports the best quality crops to avail the country of much needed US $ and sometimes, if not more often than not, we see imported crops taking the place of domestic ones in the table at home.

Imported crops for the most part are of inferior quality to those exported from the DR; the remaining lower quality or rejects are the ones that get to market in the DR.

I.E: The sugar cane industry had a surplus of production this year but lacked the resources to process the abundant crops; so much of it was turned to alternate markets. The DR actually has a record of over producing crops over the normal yields of the region. You must know that the DR owns some of the best fertile lands in the region!

[PICHARDO]

You also need to understand that agriculture is a home made product that uses almost 95% domestic raw materials to yield very good crops.
So instead of having to increase importation to export finished goods, this method produces more cash inflow with less outward expenditure of capital than any other market or industry of the DR.

You can export 1 million finished shoes from a factory in the DR, but almost 70 to 80% of raw materials have to be imported (paid for in US$). So even when you create a big outflow of goods to import US$ to the coffers of the State; the actual cycling of US$ to finish the exported goods with the external raw materials, makes the amount insignificant to the inflow of US$ from exports deriving from industries just like the agro and aviculture to name some.

The magic number is to have a greater positive inflow than outflow of foreign $ than cycling huge amounts but little inflow like the FTZ generate most of the time. The FTZ is a big helper to the country in that they provide for high numbers of jobs for the lowest and neediest of the population.

FTZ don't really create much positive inflow, unless they derive from a local supplied raw material to a good extend for the end product, say like Cigars (Tobacco).

The DR knows this very well as it's the ever positive cash flow that on the backdrop keeps our economy from sinking as many in the regions already have. Think that even as the region faltered in the tourism industry this past year, most notably Bahamas, the DR was able to keep a moderate growth ever inching up unlike those others that only rely on that single industry to generate capital or their related biz.

[PICHARDO]

I made it too complicated?

Ok:

You open a FTZ at Santiago, to manufacture tennis shoes.
The actual shoe cost is as follows:
DR supplied raw material $200 Pesos
US supplied raw material $20 Dollars
Cost to manufacture $400 Pesos (let’s keep it simple)

Total cost of goods: $600 pesos + $20 US = $40 US (at 30x1 exchange rate)
Sold to Kmart in the US for $55 US
Actual profit $15 US (don't mind any of this since it's an example only)
Taxes paid to DR for actual product exported: $0.00
Actual raw material cost imported by company to the DR: $20 US
Of that US $20 some money is paid for shipping and transit expenses in DR's docks and trucks, etc...
Of the cost of manufacture employees are paid and some services provided by local suppliers are paid for as well, enabling a micro-macro economic cycling for every manufactured product churned out by the plant.

Now, the foreign currency used to pay for the raw material imported into the DR (not related to an overseas corporation as in some cases) is obtained via the local central bank and to the exchange rate prevalent and set by the state at that point. The Central Bank must have foreign capital at hand to satisfy the outflow of capital in foreign currency or it wouldn't be able to set the interest rates for the local currency as such.

Now the second part:

You have a cooperative that just finished a good cycle and yields 100 tonnes of rice, gets a buyer overseas to make a purchase order and makes the transaction via the Central Bank with the cooperative. The inflow of foreign capital falls into the Central Bank and the crops are sent out. The same micro-macro economic cycling of the end product (packing, trucking, laborers, etc...) provides income and positive flow to the local economy, just that this time very little imported material had to be acquired and so even when the total net amount is lower than the cycling capital from the referred to FTZ manufactured goods produced, the rice produced a higher positive flow for the country than the FTZ corporation would. It's not the same to produce 1 million shoes positive flow of 1% than a 100 tonnes of rice taxed positive flow would.

Like G. W Bush said: It's all fuzzy numbers to me! LOL!!

[Ricardo900]

Originally Posted by NALs

They are not going to disappear, but rather move to other sectors.

-NALs

The idea of Haitians packing up and going home is a fantasy and pipe dream, what are they going home to??? Nothing. So they will find cheap labor in any industry or where ever they can find it and since this country is ran on corruption and capitalism (God I Love this Country) they are awaited with open arms, Bienvenido!!

If that wealthy Dominican business owner wants that brand new jeepeta, he better cut costs(hire haitians) and increase profits(fire dominicans). And if that Dominican politician wants nice phat political contributions from corporations and owners getting rich with cheap labor, he better not create policy going against it.

Don't want to turn the thread into another Haitian thread, but the op brought it up.