Restructuring the Third World Agro-Exports: Changing Production Relations in the Dominican RepublicDominican RepublicExpansion of Nontraditional AgricultureChanges in World EconomyNTAEs On a Global ScalePowerPoint PresentationSlide 7Decline in Sugar ProductionSlide 9Slide 10Slide 11State Policies in the DRAgriculture Export Commodities SystemsSlide 14Slide 15Slide 16FailureConclusionBy Laura T. RaynoldsThe D.R. was a traditional colonyColonies of the Global South produced low value agriculture exportsSugar, coffee, cocoa, tobacco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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“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.”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.”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”Decreased world demandHealth concernsHigh Fructose Corn Syrup substituteIncreased protectionist policies in Europe & the U.SCaribbean Basin InitiativeExcluded sugar quotas from DRDecreased world sugar prices Excess productionIncreased world competition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“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”““The growth of nontraditional agricultural exports in the The growth of nontraditional agricultural exports in the first half of the 1980’s is most directly linked to first half of the 1980’s is most directly linked to intensive pressure on the Dominican State from intensive pressure on the Dominican State from international financial institutions concerned with the international financial institutions concerned with the country’s substantial foreign debt.”country’s substantial foreign debt.”““As in much of Latin America, the deepening of the debt As in much of Latin America, the deepening of the debt crisis in the Dominican Republic necessitated the re-crisis in the Dominican Republic necessitated the re-orientation of state policies according to the new orientation of state policies according to the new monetarist/trade liberation approach championed by the monetarist/trade liberation approach championed by the IMF and the World Bank. This approach emphasizes IMF and the World Bank. This approach emphasizes reducing state spending and stimulating private sector reducing state spending and stimulating private sector investments, particularly in exports, as the way to investments, particularly in exports, as the way to increase economic growth and debt repayment.”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.”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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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