Unintended Consequences of Food Subsidies : The Case of the Haiti Rice Subsidy

Arias, Diego; Carneus, Maxime

Unintended Consequences of Food Subsidies : The Case of the Haiti Rice Subsidy

Autores

Arias, Diego

Carneus, Maxime

Editor

World Bank, Washington, DC

Descripción

Haiti is an important rice consumer, and a big rice importer. Around 86 percent of the Haitian population consumes rice. The decision to implement an indirect subsidy was made based on the fact that import prices had in the past been transmitted fully and immediately to rice consumers. Thus, a subsidy to the price of rice at the level of the importers was expected to be passed on immediately into benefits (savings) to rice consumers. The Government also prohibited rice exports to the Dominican Republic in order to avoid re-export of subsidized rice. The subsidy scheme was implemented by forming a public-private sector Presidential Commission between the Central Bank of Haiti (BRH), the President's Office and rice importers. Although the rice price subsidy program did produce the intended savings to Haitian consumers during the 4-month period of the subsidy program (April-August 2008), this intervention caused medium term distortions in the domestic market of imported rice such that domestic prices of imported rice have risen beyond the price that consumers would have faced without a subsidy program. The actual prices consumers faced after the subsidy program was implemented were much more volatile than the estimated price without a subsidy program, pointing to also an increased consumer uncertainty about local market prices for rice. Using a targeted food voucher as a subsidy mechanism is not only more efficient, but can have higher impact on nutrition as it can be used for a wide variety.
Al día de hoy hay varias Bolsas y mercados en la Región de América Latina y El Caribe (LAC). Las mismas facilitan el comercio y el desarrollo de productos financieros en países cuyas economías tienen una proporción relativamente elevada de actividades agrícolas primarias y secundarias o bien de de subastas o importaciones sustanciales de alimentos. Este informe está dirigido a observar el reciente desarrollo de las Bolsas de Productos en LAC y propone recomendaciones de políticas públicas que pueden apoyar el desarrollo de dichos mercados agrícolas. Forma parte de la “Serie Periódica de Documentos de Precios de Alimentos”, que aspira a incluir información específica por país, al igual que un análisis regional vinculado con alimentos, logística, y políticas agrícolas, para tratar de aprender de la crisis alimentaria de 2007-2008 y proyectar hacia adelante conceptos de innovación para mejorar la eficiencia de los mercados alimentarios, reduciendo la vulnerabilidad frente a los shocks exógenos en la producción y el comercio en América Latina y del Caribe.

Palabras clave

AGRICULTURE, AVERAGE PRICE, CENTRAL BANK, COLLUSION, COMMODITIES, COMMODITY, COMMODITY PRICES, CONSUMERS, DELIVERY MECHANISM, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRICE, DOMESTIC PRICES, ELASTICITY OF SUBSTITUTION, ENVIRONMENTAL SUSTAINABILITY, EXPENDITURES, EXPORTS, EXTERNAL FINANCING, FINANCIAL CRISIS, FOOD IMPORTS, FOOD MARKETS, FOOD POLICY, FOOD PRICE, FOOD PRICE INFLATION, FOOD PRICE SUBSIDY, FOOD PRICES, FOOD PRODUCTION, FOOD PRODUCTS, FOOD SECURITY, FOOD SUBSIDIES, GOVERNMENT INTERVENTION, GOVERNMENT INTERVENTIONS, GOVERNMENT SUBSIDY, GRAINS, INCOME, INCOMES, INDEX NUMBERS, INDIRECT SUBSIDY, LIBERALIZATION, MACROECONOMICS, MAIZE, MARKET PRICE, MARKET PRICES, MERCHANDISE, PREMIUM PRICE, PRICE BEHAVIOR, PRICE ELASTICITY, PRICE ELASTICITY OF DEMAND, PRICE FIXING, PRICE INCREASE, PRICE INCREASES, PRICE INDEX, PRICE INDICES, PRICE SUBSIDIES, PRICE SUBSIDY, PRICE UNCERTAINTY, PROFIT MARGINS, PUBLIC POLICIES, PURCHASING, PURCHASING POWER, RICE, SAVINGS, SELLING PRICE, SOYBEAN, SPATIAL ECONOMICS, STOCKS, SUBSTITUTE, SUBSTITUTION, SUPPLY CHAIN, SUSTAINABLE DEVELOPMENT, TAXPAYERS, TRADE LIBERALIZATION, VOLATILITY, WFP, WHEAT, WORLD FOOD PROGRAM