Tuesday, June 12, 2012

The Bahamas has been urged to end its embargo on direct agriculture imports from Haiti ...with the current system thought to quintuple produce costs via Florida-based middlemen as it transits through the US

Haiti Agriculture Embargo Raises Costs Five' Times

Tribune Business Editor

Nassau, The Bahamas

THE Bahamas has been urged to end its embargo on direct agriculture imports from Haiti, with the current system thought to quintuple produce costs via Florida-based middlemen as it transits through the US.

Speaking to Tribune Business ahead of the proposed Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) likely trade mission to Haiti in September this year, Chester Cooper, the organisation's chairman, said the current health-related barrier to direct imports from the Bahamas' southern neighbour "stifles trade" and drives up costs for consumers in this nation.

He suggested that by creating a Bahamian inspection station in Haiti, so that this nation's officials could examine inspect agricultural produce for health and safety issues before they were imported here, direct trade between the two nations would increase to such an extent that it would open up new shipping routes.

And, ultimately, Mr Cooper said increased trade could have the effect of bolstering Haiti's economic stability and reducing the flow of illegal migrants northwards to the Bahamas, creating a win-win for both nations.

Recalling that the embargo on direct Haitian agricultural imports had been raised as a key issue on the last BCCEC trade mission to that country in 2007-2008, Mr Cooper told Tribune Business: "Regrettably, there hasn't been any advancement on the issue.

"I've spoken with Phillip Miller at the Ministry of Agriculture, and understand they have tried to make some moves on the issue, and then there was the earthquake, the cholera. There's always something that throws the mission off."

While a Bahamian team had previously visited Haiti to see if this nation could establish an agricultural inspection facility there, Mr Cooper said this had occurred several years ago before the earthquake that devastated the Bahamas' southern neighbour.

Of the existing embargo, Mr Cooper told Tribune Business: "It stifles direct trade itself. If we can generate the volumes, we can get more efficient shipping routes between the Bahamas and Haiti. But, so long as the volumes are so low, it creates inefficiencies in pricing."

If just two boxes of mangos were being shipped from Haiti to the Bahamas, Mr Cooper said it was more cost effective to send them through the US anyway, rather than direct to this nation. If volumes rose, the demand for direct shipping would, too, ultimately leading to the creation of new shipping companies and routes between the two countries.

Tribune Business understands that if mangos are sold in Haiti for $0.20 per product, Florida-based wholesalers may charge as much as $1 for them once they have reached the US - mark up of five times' or 400 per cent.

"In effect, produce coming into the Bahamas from Haiti passes the Bahamas, transits the US as they have US Department of Agriculture inspection on the ground that facilitates trade to the US," Mr Cooper said.

"A box of Haitian mangos, for example, might eventually find its way to the Bahamas after transiting the middleman in Florida, who would've tacked on their mark-up. This is most inefficient and drives up the costs to Bahamians unnecessarily. There were no doubt good reasons for this position, but it has now been several decades and this should be promptly reviewed."

He added: "The Bahamas government should put in place its own inspection protocols and expedite the removal of these restrictions. Ending the embargo will not only reduce the cost of Haitian products imported to the Bahamas, and improve trade but, taking it to the logical conclusion, it might help the Haitian economy and our relations with Haiti by improving commerce."

Mr Cooper added that if the Government was to "commit" to removing obstacles such as the direct agriculture embargo, it would open up more trade and investment opportunities between the Bahamas and Haiti, and encourage more businesses to go on the September trade mission.

"It's important on many levels," he added. "If we can achieve it, obviously there's the commercial aspect and it would make some contribution to the Haitian economy. If we take it to its logical conclusion, the more liberalised the Haitian economy is, the fewer Haitians will migrate illegally to the Bahamas.

"From a macroeconomic point of view, down the road the more trade Haiti gets, the better for everybody. We'll be working hand-in-hand with the Government on these issues.

"We live in a very open economy and import the bulk of the goods we use here. Typically, we import goods from south Florida. The south Floridians bring them in from elsewhere, and it's important for us to create diverse linkages where possible to reduce the overall cost of food."

June 11, 2012