Analysis of Agricultural and Food Price Policy in Haiti: An Adaptive Policy Simulation Model

Helen H. Jensen, Kamal Banskota, Stanley R. Johnson, Justo Manrique
October 1991  [91-TR 22]

In early 1986, the government of Haiti began a series of economic reforms in agriculture designed to reduce the degree of government price intervention, to increase efficiencies in the agricultural sector, and to reduce restrictions on the quantities of food imports. The critical extent of hunger and malnutrition in Haiti has underscored concerns by USAID and other donor organizations for the need to consider the impacts of agricultural policies and food aid on the agricultural sector, government finances, and food availability.

The 1987 economic reforms eliminated export taxes (on coffee), broke up government trading monoppolies, and removed most quantity restrictions on agricultural imports. Seven principal food commodities (rice, maize, millet, beans, sugar, chicken parts, and pork meat) remained subject to import licensing and new ad valorem tariffs of 50 percent. There were also concurrent changes in taxing and charges for wheat and wheat flour. Such pricing policy changes have significant impacts on production and consumption of food commodities and on important aggregates such as farm income, the purchasing power of consumers, and the degree of hunger as measured in calorie availability.

A policy model designed to operate on a microcumputer was developed to evaluate these impacts. The model utilizes basic supply and demand behavioral parameters and is designed so the analyst can easily alter these parameters and projection assumptions.

In an extension of the model, a coffee sector was added to evaluate impacts of export tax changes.

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