By Laura T. Raynolds

1. Restructuring the Third World Agro-Exports:Changing Production Relations in the Dominican Republic By Laura T. Raynolds

2. Dominican Republic • The D.R. was a traditional colony • Colonies of the Global South produced low value agriculture exports • Sugar, coffee, cocoa, tobacco

3. Expansion of Nontraditional Agriculture • Since the 1980s, there has been an active breakdown of the traditional colonial based export system • Several factors contribute to a shift from traditional, to nontraditional export commodities • Debt crisis – is central to this change • TNCs • State governments • This change is fostered by the strong backing of international institutions

4. Changes in World Economy • The new agriculture export sectors transformed, but did not eliminate traditional labor processes • Improved transportation, preservation and communication systems • Made geographic separation of production and markets possible

5. NTAEs On a Global Scale • “Latin America witnessed the rapid growth of beef, fruit, and vegetable exports to satisfy North American appetites and a boom in flower exports to adorn Northern dinner tables.”

6. It is often assumed under neoliberalism that States in the Global South no longer play an important role in the economy • “3rd world [sic] governments are not simply de-regulating national economies and policies, they are trying to restructure local economies to accommodate change in the world economic and political conditions” • Many countries shifted to non-traditional agricultural exports- it should not be seen simply as a reaction to the “market”, but as “a result of an active political project of export substitution pursued by 3rd world [sic] states with strong backing from international institutions.”

7. The current debt of any country is an important factor in shaping agricultural policies and exports throughout Latin America • “The autonomy of Latin American states typically is considered to be undermined by the spread of international commodity markets, the increasing power of transnational corporations and institutions, and the global impacts of policy decisions in the First World”

8. Decline in Sugar Production • Decreased world demand • Health concerns • High Fructose Corn Syrup substitute • Increased protectionist policies in Europe & the U.S Caribbean Basin Initiative Excluded sugar quotas from DR • Decreased world sugar prices • Excess production • Increased world competition

9. Raynolds analyzes this “process” of restructuring the Dominican Republic’s agricultural sector. The Dominican Republic has increased production of fresh fruit and vegetable’s for export to compensate for the falling traditional agricultural exports • The problem with this shift to non-traditional export is that the switch is to a new market, and the production to non-traditional exports has the potential to be highly unstable. This has been the case for the Dominican Republic

10. Dominican Republic • “The Local economy has been dominated for centuries by the production of sugar, and to a lesser extent, coffee, cocoa, and tobacco for sale in, first, European and, then later, North American markets. The Dominican Republic has been a classic case of what is often referred to as a dependent agricultural export economy- where the national economy is dominated by a few primary products that are produced on the basis of extensive foreign investment and are destined for metropolitan markets- or more specifically in the Caribbean literature as a plantation economy revolving around the production of sugar”

11. “The growth of nontraditional agricultural exports in the first half of the 1980’s is most directly linked to intensive pressure on the Dominican State from international financial institutions concerned with the country’s substantial foreign debt.” • “As in much of Latin America, the deepening of the debt crisis in the Dominican Republic necessitated the re-orientation of state policies according to the new monetarist/trade liberation approach championed by the IMF and the World Bank. This approach emphasizes reducing state spending and stimulating private sector investments, particularly in exports, as the way to increase economic growth and debt repayment.” • “The International sponsored structural adjustment program reduced state support for the production of basic foods for the local market and encouraged agricultural export production.”

12. State Policies in the DR • Export Promotion Law (NTAEs) Benefits nontraditional agricultural & industrial exporters, providing incentive & import duty exemptions on materials used in the production of export commodities • Agro-Industrial Law (industrialization) The law grants income tax and import duty exonerations from 40-100% to firms involved in the production of agricultural commodities that are standardized, packaged, or processed- in other words all non-traditional agricultural exports, as well as agro-industrial products for domestic and foreign markets

13. Agriculture Export Commodities Systems • Out-grower system • Oriental vegetables • Showed that small growers do not understand and are unable to meet international restrictions • Often concerned with short term profits, not sustainability

14. The out-grower model is characterized by a large number of small firms that limit their fixed investments and maximize their production flexibility by contracting with peasant growers to produce non-traditional commodities. • This contracting system is commonly utilized in the DR in the production of agronomically sensitive and labor-intensive horticultural crops, since the exporting firm is thus able to shift a large portion of the high production risks and costs onto peasant producers.

15. Plantation System • Workers hired to work on company managed farms • In the DR companies (Dole, Chiquita) use state land • Pineapples • Corporations able to have diverse locations so they can move easily • Force countries to negotiate for lowest price

16. 2nd major model used in the production of nontraditional agricultural export commodities in the Dominican Republic • New plantations have higher fixed costs over enterprises using contract production systems, pineapple corporations maintain a great deal of flexibility through their global sourcing operations. • By maintaining subsidiaries in diverse locations- including Hawaii, Thailand, the Philippines, Guatemala, and Honduras- Chiquita and Dole can guarantee access to the lowest cost produce, as well as compensate for natural crop fluctuations.

17. Failure • Stagnated growth after 1986 • Fresh agriculture export decreased from $45 million to $34 million • State unable to guarantee conditions for accumulation in the sector due to mounting debt • Economic chaos • Stop paying incentives • IMF Food Riots

18. Conclusion • The state plays a critical role in the shift from colonial plantations to non-traditional agricultural exports • States in the Global South implement policies to attract foreign investment and insert themselves into the international market • But the State is limited by IMF deregulation • Economic instability of NTAEs creates instability in the sector and for the society