Wall Street Journal
By DAVID LUHNOW
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Business for Ilia Alsene, one of Haiti's ubiquitous "marchands"—or merchants—who sell food and beverages at curbside stalls here, is a lot worse since the country's devastating earthquake. But Ms. Alsene doesn't blame the quake so much as the international relief effort that followed.
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"I have fewer customers now because they are handing out free food down the street," says the 52-year-old, pointing to the nearby Champs de Mars plaza where aid organizations regularly hand out food to tens of thousands of people camped there in tents. Ilia Alsene, seen selling food in Port-au-Prince, says free-food handouts near her stall have hurt her business.
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After the Jan. 12 quake, which killed as many as 300,000 people, the world launched a massive relief effort to bring food, water, medicine and other supplies to needy Haitians. The U.S. alone has spent more than $665 million, official figures show.
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But only a tiny fraction of that money is being spent in Haiti, buying goods from local businesses. Worse, the aid is having the unintended consequence of making life harder for many businesses here, because of competition from free goods brought in by relief agencies. The damage to Haitian companies is making it harder for them to get back on their feet and create the jobs the country needs for a lasting recovery.
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U.S. officials acknowledge that the aid effort has bypassed local businesses, but say the scope of the disaster made getting relief supplies in quickly a priority. They also say they will be buying more products from Haiti as the relief effort shifts to longer-term rebuilding. Alex Zamor's drinking-water factory is operating again at near full capacity after suffering damage from the earthquake. But he still hasn't rehired 200 employees at the factory because sales are so weak. He blames free water handed out by the relief effort.
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"Of course we welcome the relief, but nobody wants to buy water if there's free water on the streets," he says. Mr. Zamor says international relief agencies should be sourcing more of their products for the relief effort from Haiti itself. "We should be helping Haitian companies instead of companies in Florida," he says.
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In most disaster relief, only a tiny fraction of aid money goes through the local government. And as little as 5% of the budgets of humanitarian agencies is spent locally in the countries they help, according to Peace Dividend Trust, a Canadian nongovernmental organization. "Every dollar that is spent locally is a dollar spent twice, because it will help create the jobs that Haiti needs to recover," says Marlene Otis, the Haiti country director for Peace Dividend Trust.
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Tom Adamson, a transplanted Canadian, runs one of only two mattress companies in Haiti. Three of his 10 retail stores around the country were destroyed, and his factory suffered minor damage. But he says the biggest effect from the quake has been increased competition. In the weeks after the temblor, a mattress company in the Dominican Republic sent 10,000 foam mattresses for the relief effort, getting import duties at the border waived. He and U.S. officials say nearly all relief supplies don't get charged import taxes. Meanwhile, Mr. Adamson's mattress company has a container of chemicals used to make foam mattresses stuck for months in Haitian customs, where is still being asked to pay import taxes.
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"Things like this make it very hard for me to compete," he says. Officials at the U.S. Agency for International Development, which is running the relief effort for the U.S. government, say many Haitian businesses were on their knees following the quake and in no shape to handle orders. Quality is another consideration, and products like plastic tarpaulins are being purchased in the U.S. because they can better withstand Haiti's rainy season, said Carleene H. Dei, AID's Haiti mission director.
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But she said the scope for local businesses to participate as suppliers and contractors in the rebuilding will grow significantly. "We are very cognizant of the fact that the way to develop Haiti is to work with local organizations," said Ms. Dei, whose sleeps in a cot in her office because her home was destroyed in the quake. "We are making every effort to do that."
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AID has been mandated by the U.S. and Haitian governments to use local suppliers and expertise as much as possible. But one hurdle is AID's strict regulations, which call for dealing with companies that have a proven track record and transparency. That makes it more difficult to deal with smaller Haitian firms, many of which don't have outside auditors, for instance. Peace Dividend Trust, the Canadian NGO, tries to act as a matchmaker for relief organizations and local companies. Even before the quake, the group built up a database of Haitian companies and posted it on a Web site (www.haiti.buildingmarkets.org) so procurement officers know what is available locally.
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To overcome doubts about local producers, Peace Dividend workers visit each company to ensure that it is a legally incorporated firm and has quality products. "There's a deficit of confidence in local producers that we're trying to overcome," says Ms. Otis. One sensitive area in the sourcing of relief goods is food. The U.S. government buys the rice it distributes in Haiti from American farmers. When France began handing out sacks of rice during a visit here by French President Nicolas Sarkozy, the bags bore a stamp that said the rice was from Haiti.
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A U.S. official acknowledged that donation of food brought in from other countries tends to depress prices for local producers, but said it would be a temporary effect. The official stressed that the U.N. World Food Program, which is feeding hundreds of thousands of Haitians a day, will begin trying to buy as much locally grown food as possible.
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Frederic Madsen, CEO of Brasserie Nationale d'Haiti SA, Haiti's largest beverage company and only beer maker, says the fate of his company is closely tied to the fate of Haiti's marchands, women like Ms. Alsene. "When women like that don't make enough money, they stop buying my products," he says. "They are the backbone of this economy."
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—José de Córdoba and Ianthe Jeanne Dugan contributed to this article. Write to David Luhnow at david.luhnow@wsj.com

ASSOCIATED PRESS
BY PAISLEY DODDS
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Haiti's rice farmers are dismayed. It's nearly harvest time in this fertile valley where the bulk of Haiti's food is grown, and they're competing once again with cheap U.S. imported rice. Just down the road, vendors are undercutting them, selling the far less expensive grain. Subsidized U.S. rice has flooded Haiti for decades. Now, after the Jan. 12 quake, 15,000 metric tons of donated U.S. rice have arrived.
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"I can't make any money off my rice with all the foreign rice there is now," said Renan Reynold, a 37-year-old farmer who makes an average of about $600 a year. "If I can't make any money, I can't feed my family." Last month's catastrophic earthquake that killed an estimated 200,000 people and spurred emergency food needs for more than 4 million has raised a familiar predicament for aid organizations - how to help without undermining Haiti's fragile economy.
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This nation born nearly 200 years out of a slave revolt hasn't been able to feed itself for more than two decades and now imports most of its food.
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Since the quake, aid groups have spearheaded cash-for-work programs, some of which intend to help struggling farmers pay for seed. They're also helping with irrigation and crop diversification projects and working with Haiti's government to analyze soil. But little is being done to change endemic problems, according to Jean Andre Victor, a Haitian agronomist. He is among analysts who believe Haiti needs radical agricultural reforms - not constant food aid.
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"There's a long history in Haiti of groups like USAID flooding the market with rice and other imports," said Victor. "This is not what we need. We need real help and that means completely changing the agricultural system." Agricultural production accounted for nearly half of gross domestic product in the 1970s. It now amounts to less than a third. And U.S. rice imports have long eclipsed Haitian production, due in part to smaller local yields because of environmental degradation and the lowest rice import tariffs in the Caribbean community.
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The earthquake has only exacerbated needs in farming provinces. The government says more than a half-million people have fled the capital for provinces, which lack the infrastructure and food to sustain such a population surge. The coming rains will only make things worse. When the earthquake hit, Haiti was recovering from about $1 billion in crop damage from 2008 tropical storms. Now, farmers lack cash to buy seeds for the planting season that begins in two weeks, and food prices have already risen 10 percent since the quake.
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Aid organizations say families caring for displaced people are spending their savings to feed new arrivals and consuming food stocks. "Rural areas experiencing the highest levels of displacement from Port-au-Prince and surrounding areas are the most affected," said Dick Trenchard, Assessments Coordinator for the U.N.'s Food and Agriculture Organization in Haiti.
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The U.S. Agency for International Development, which has been working in Haiti for decades, is providing more than $400 million in earthquake aid with U.S. taxpayers set to give some $113 million in food aid alone this year. But U.S. farmers also stand to benefit from the earthquake. Last year, Washington paid farmers some $12.9 billion in subsidies, which critics say have unfairly deflated international prices. That makes it harder for poorer nations to develop their economies by expanding markets abroad.
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Paul O'Brien of Oxfam America says the lessons of the harm of flooding a country like Haiti with subsidized rice should have been learned a long time ago. "The days are gone when we can throw up our hands in terms of unintended consequences; we know now what these injections can do to markets," he said. "The question we want asked is what is being done to guarantee long-term food security for Haitians."
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Haiti's 2008 food price riots prompted President Rene Preval to announce subsidies that would lower the price of rice. And still, there is plenty of malnutrition. Some 2.4 million Haitians - out of a population of nearly 10 million - cannot afford the minimum daily calories recommended by the World Health Organization.
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With planting season just weeks away for crops including beans and spinach, the Haitian government is looking at ways to boost agricultural production.
But donors often sink more money into emergency aid than such long-term projects. The U.N. Food and Agriculture Organization has warned only 8 percent of a $23 million appeal to help Haiti revive food production has been funded.
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James Woolley, a senior agronomist working with USAID in Haiti, said the multiple challenges that must be addressed in order to boost production include the country's small farming plots and persistent litany of natural disasters. One way of attacking the problem of getting Haiti to be able to feed itself again is to focus on diet.
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Before the 1970s, Haitians only ate rice once or twice a week, getting starch from other local staples like sorghum and manioc, Woolley said.
Today, rice is a staple but often U.S.-subsidized rice costs less than locally grown crops. On Friday, a 25-kilogram (55-pound) bag of US rice cost about $36, compared with $60 for the same size sack of Haitian rice.
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USAID said it is investigating reports that bags of donated rice are being sold on the market and studying whether its policies in Haiti are having adverse effects on local markets.
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"USAID conducts regular analyses in Haiti and across the world to make sure that our food aid does not serve as a disincentive to local production," Moira Whelan, a spokeswoman for USAID in Washington, D.C., said in an interview Thursday.
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Whelan would not respond, however, when asked what the analyses had determined in Haiti. U.S. intervention in Haitian agricultural policy is not without precedent. In the 1970s, fearing indigenous pigs could spread swine fever, the United States - in conjunction with USAID - moved to replace all of Haiti's hearty Creole pigs with pigs from Iowa. The end result was the fragile U.S. pigs often became sick, preferred expensive feed and had fewer litters.
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Reynold, meanwhile, stands hunched over the small rice paddy he rents from a property owner and hopes opportunity will come out of Haiti's latest crisis.
He needs cheap credit, cheaper fertilizer and more government aid, he said. "Each year, it gets harder to survive."
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Associated Press writers Frank Bajak, Jonathan M. Katz and Dario Lopez Mills in Port-au-Prince and John Heilprin at the United Nations contributed to this report.

Be sure to check out the video edition of this article below:
http://www.alternet.org/blogs/video/90617/

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wonderful article! He tells the truth about Haiti, the forced neoliberal "reforms", the coups, etc.