Diagnostic de l'agriculture et du développement rural en Haïti et propositions de politiques et de stratégies pour l'agriculture et le développement rural

HAITI AGRICULTURE AND RURAL DEVELOPMENT DIAGNOSTIC AND PROPOSALS FOR AGRICULTURE AND RURAL DEVELOPMENT POLICIES AND STRATEGIES October 5, 2005 The present study is the result of a collaboration between the Ministry of Agriculture, Natural Resources and Rural Development and the World Bank in the context of the Interim Cooperation Framework for Haiti. The views expressed in this report are the authors’ and do not necessarily represent those of the institutions mentioned. 1 36785 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Abbreviations and Acronyms FAFO Independent Research Foundation, Norway ERF Environmental Rehabilitation Fund (proposed) GDP Gross Domestic Product GTZ German External Assistance Agency HLCS Household Level Conditions Survey IADB Inter-American Development Bank ICF Interim Cooperation Framework IHSI Haitian Institute of Statistics and Informatics LAC Latin America and Caribbean Region MARNDR Ministry of Agriculture, Natural Resources and Rural Development (Haiti) MDG Millennium Development Goals NGO Non Government Organization PRSP Poverty Reduction Strategy Paper TSS Transitional Support Strategy UNDP United Nations Development Program UNEP United Nations Environment Program USAID US Agency for International Development 2 Acknowledgements The Task Team for this Report and the accompanying background papers (see Annex 1) was composed of the following: Jean-Claude Balcet (Agriculture production systems), Gilles Damais (Regional rural services centers and overall agriculture development in Haiti), Willy Egset (Local governance and household surveys), Sophie Herrmann (Natural resources management, Spatial analysis and overall Research assistance), Michael Justesen (Research Analyst, poverty profile), Nadim Khouri (Task Team Leader and Natural resources management), Nathalie Lamaute (Rural governance survey), Paul Bennett Siegel (Spatial analysis), Dorte Verner (Rural poverty profile), Pierre Werbrouck (Agriculture economics and Productive alliances). The study summarized in this Synthesis Report was undertaken under the overall guidance of a Steering Committee led by Jean-Marie Binette (MARNDR) other members of the Government’s steering committee are listed in Annex 4. At the Bank, the Country Director is Caroline D. Anstey and the ESSD Sector Leader is Pierre Werbrouck. Other members of the Task Team who contributed to the study and the Report include: Jobert Angrand (Regional rural services centers), Ramón Anria (Team support and final report production), Diego Arias (Rural development, IADB), Alex Bellande (Agriculture production systems), Piet Buys (GIS data and maps production), Uwe Deichman (GIS data and Maps production), John S. Horton (Agriculture/watershed development, IADB), Grace Menck de Oliveira Figueiro (Research assistance), Hiska Noemi Reyes (Social impact assessment), Maria Clara Rodríguez (Productive alliances), David Wooddall- Gainey (Maps production). The following investigators carried out the local governance field survey: Duken Alvares, Wista Delice, Jean Chesnel Jean, Irdele Lubin, Alain Robert Thermil. The Team acknowledges guidance and comments received throughout the study from Caroline Anstey, John Redwood, Mark E. Cackler, Charles Feinstein, Robert Schneider, Antonella Bassani, Nwanze Okidegbe, Philippe Auffret, Auguste Kouame, Manuel Schiffler, Pedro Olinto, and Alain de Janvry. 3 TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................................... 5 A. STUDY OBJECTIVES ......................................................................................................................... 10 B. DIAGNOSIS........................................................................................................................................... 12 C OUNTRY B ACKGROUND AND T RENDS : ................................................................................................... 12 C HARACTERISTICS OF P OVERTY ............................................................................................................... 13 T HE R URAL E CONOMY ............................................................................................................................. 14 R URAL H OUSEHOLDS , THEIR W ELL - BEING , A SSETS , AND L IVELIHOOD S TRATEGIES : .............................. 18 Measures of Rural Incomes................................................................................................................. 18 Other Measures of Well-being ............................................................................................................ 19 Rural Assets in Haiti:.......................................................................................................................... 19 C. POVERTY EXIT STRATEGIES ........................................................................................................ 25 D ETERMINANTS OF I NCOME ..................................................................................................................... 25 P OTENTIAL S TRATEGIES AND P OLICY R ESPONSES : .................................................................................. 28 L ESSONS L EARNED FROM P REVIOUS E XTERNAL S UPPORT ....................................................................... 30 D. POLICIES AND INVESTMENTS....................................................................................................... 32 A GRICULTURAL P RODUCTION S YSTEMS IN H AITI AND P OTENTIAL FOR I NTENSIFICATION :...................... 33 T HREE P OTENTIAL I NTERVENTIONS FOR M AKING A D IFFERENCE ON THE G ROUND :................................ 37 ACTIVITY 1: Support to Regional Rural Service Centers ................................................................. 39 ACTIVITY 2: Support to Regional Development Plans and Their Implementation............................ 40 ACTIVITY 3: Increased Flow of Funds to the Rural Space ............................................................... 42 E. CONCLUSIONS AND THE WAY AHEAD ....................................................................................... 46 REFERENCES ........................................................................................................................................... 48 A NNEX 1: L IST OF S TUDY B ACKGROUND P APERS AND OTHER R EFERENCES ............................................ 49 A NNEX 2: M APS ....................................................................................................................................... 51 A NNEX 3 STUDY DESIGN AND EXECUTION .................................................................................... 63 A NNEX 4 S ELECTED D ONOR A CTIVITIES IN R URAL A REAS ...................................................................... 65 4 EXECUTIVE SUMMARY 1. An Opportunity—the Interim Cooperation Framework (ICF). The majority of Haiti’s population and a disproportionate number of the poor live in the rural areas. About 58% of rural households live in absolute poverty (based on a US$1 a day extreme poverty line). Haiti’s achievement of the Millennium Development Goals is unlikely, especially in rural areas. Over the last few years, the situation has been exacerbated by political and security turmoil and by the limited input of external financial and technical assistance. However, a new era of international collaboration was opened in May 2004 with the formulation of the ICF of which the present study is a product. 2. Objective: The present study aims to update existing knowledge of the rural space, its population, its institutions and its potential for growth; as well as identifying selected interventions that could contribute to growth in the rural sector. This would be achieved by building on households’ own poverty reduction strategies and by taking into account Haiti’s diverse conditions across regions. 3. Key Findings: Overall, investments in education, health, infrastructure, rural institutions, agriculture and social protection are key elements of a balanced national rural development strategy. To be effective, the proper mix of policies is important. Haiti’s assistance to rural areas will need to be differentiated to fit the following typology of the rural poor—based on households’ access to land and their present poverty exit strategies: (i) For households without land and very low endowment of other assets (education, tools, social networks) who rely mostly on their unskilled labor for their survival: assistance should be in the form of direct financial help, employment generation and support to improvement of health and education. An estimated 23% of Haitian households (both rural and non-rural) belong to this category; (ii) For households with diminutive land holdings (less than 1 ha) and weak general asset base, who cultivate their land but pursue a variety of additional, off- or non-farm income generating activities: assistance for increased agriculture productivity will be beneficial mostly for subsistence farming in the short-run but will need to be complemented with increased non-farm employment opportunities and education for increased mobility of the labor force. Many of these households cultivate land areas that are too small for sustained and viable production on the long-run. About 40% of Haitian households belong to this category. (iii) For households with an average land holding (approximately 1-4 ha) who live mainly from their land and may use various inputs when available and rent additional tools—they constitute the group most likely to benefit from short- as well as long-term efforts for increased 5 agriculture productivity. Investments in education, health, public infrastructure will be essential to ensure access to production technologies and to markets. About 30% of Haitian households belong to this category. (iv) For households with larger holdings, stronger asset base (tools, fertilizers, etc): assistance will target more specifically the “growth” component of the overall development strategy and will include diversification and increased productivity for higher value crops and more commercial production. Public infrastructure and increased commercial financing are essential. About 6% of total Haitian households are in this group. (v) For the small group of households with high formal skills and / or strong asset base who pursue higher pay-off, non-farming activities: no specific assistance is recommended under the present study, except that it is in this group that most of the possible private financing of rural development is present. Means of attracting this funding and partnering with the private sector for rural development are also investigated in the study. Less than 1% of the Haitian households belong to this category. 4. The methods and diagnostics results on which the above policy recommendations were built are presented in the following sections of this executive summary—as well as three specific programs for practical implementation of the policies recommended above. 5. Methodology: This study was conducted under the leadership of Haiti’s Ministry of Agriculture, Natural Resources and Rural Development and in partnership with IADB and other members of the ICF’s Rural Development Sector Table—an outfit for Haiti- donor coordination. The study: (i) analyzed the 2001 household living conditions survey to examine the determinants of rural poverty on a departmental basis and provide insight into the productive, social and locational assets that the rural poor have access to; (ii) evaluated the significance of these assets for household livelihoods and strategies in their specific institutional, policy and risk context ; (iii) conducted participatory field surveys to “ground-truth” some of the statistical findings as well as conduct an assessment of local institutions and local governance of significance to rural growth at the community level; (iv) collected and analyzed information on emerging possible interventions in support of rural growth; (v) carried out a " spatial overview " that included the collection and analysis of existing spatial data and maps, and the production of new maps, and (vi) conducted consultations with Government/Civil Society to assess the preliminary findings of the study and extract lessons learned from previous experience with rural development interventions. 6. Study Outputs: The findings of the study are presented in the current synthesis paper and based on eight background papers on the following topics: overview of the rural economy; poverty and labor; potential for agriculture production intensification; 6 private/public alliances for rural growth; governance and local institutions; natural resources rehabilitation; evaluation of regional rural services centers; and a spatial overview of Haiti. The study’s findings contribute to the knowledge-base of the ICF partners and will help define rural development policies that will take into account Haiti’s sectoral and territorial dimensions. 7. Diagnostic Findings . The key findings from the rural economy and poverty diagnostics with policy implications include the following: (i) Agriculture continues to play a dominant role in the Haitian economy, contributing to almost 30 percent of GDP (2002 figure) and accounting for around 50 percent of overall employment, 2/3 of employment in rural areas, and 3/4 of employment for the poor; (ii) But the overall importance of the agriculture sector is declining in great part because of a decline in productivity due to depleted natural resources, poor know-how, and the disruptive effects of political turmoil, poor security, natural disasters, and precipitous trade liberalization without complementary social measures; (ιιι) Haitian farmers, in large part, live in poverty and experience various levels of food insecurity . Hence their livelihood and survival strategies are predicated not only on monetary revenue, but also and preeminently on food subsistence and risk mitigation; (iv) There is a high level of inequality in assets and incomes within a basic agrarian structure of small-holdings, owner-operated, and capital-poor production of a mix of subsistence and market crops; (v) Eight out of every ten rural households have access to land , and the majority of these own (usually informally) and cultivate their own plots. Land holdings are small and dispersed, with an average of 1.8 hectares per household. However, land could be an “anchor” to poverty status as many landless are less poor than those who “own” land (the cut-off being at around 2.5hectares of land); (vi) Location is an important asset . Proximity to markets, schools, hospitals, roads, and other assets matters significantly in the life of the poor. Maps were produced to define priorities for intervention in the rural areas. (vii) The main determinants of rural income are : human capital (education), family size, migration, gender, land size, access to public infrastructure, and the use of productivity enhancing agricultural techniques and inputs. 8. The institutional, policy and risk context affects how household assets are managed and determines the extent to which successful livelihood strategies can be undertaken. (i) Formal rural institutions in Haiti are very weak . The decentralized structures of government have not been fully implemented in practice; (ii) However, there is often a dense network of informal institutions that can compensate for the absence of government institutions. Access to 7 health and education via NGOs and other informal institutions play an important role in rural livelihoods and determine the degree of poverty; (iii) Peasants still do not have a political “voice” . Political activism that emerged in the 1980’s has not resulted in a strong voice for rural and peasant-based advocacy. This reinforces the previous development neglect vis-à-vis the rural areas. (iv) The private sector’s virtual absence from rural areas is due to a lack of rural infrastructure, access to credit and other factors described above. 9. Agriculture as an engine of growth . The study on farming systems shows that areas in different agro-ecological zones have clear potential for development. They encompass the following zones: humid highlands, irrigated and rainfed (humid) lowlands, and dry and semi-arid areas. In each of these agro-ecological zone, there are identified ‘lead’ crops with high value added that can respond to market demand and serve as engines of growth either as sole crops or in crop associations. At least in the short-to-medium term it is important to support the agricultural sector as a key engine of rural growth as it can produce multiplier effects for the rest of the rural economy. Three Potential Interventions for Making a Difference on the Ground: 10. Finally, the study reviewed recent and proposed efforts in the areas of regional development, natural resources management and agricultural development with respect to consistency with the above policy directions and identified three types of interventions that could be promising with respect to the following criteria: (i) they support present sources of agricultural growth with a view for future diversification; (ii) they allow for multi-sectoral support to strengthen households in their strategies for growth (social and human capital, infrastructure, etc.); (iii) they are consistent with ICF and Trasitional Support Strategy priorities for intervention and in particular they complement the on-going Community-Driven Development interventions. 11. The following three areas of intervention are mutually reinforcing and they would need to be complemented with additional multi-sectoral analysis to be effective: (i) Support to Regional Rural Services Centers : building on past successes with decentralized agricultural research, regional centers would be quickly re- habilitated and staffed to provide support that could revive agriculture production where feasible and start providing selected “bundles” of additional support (adult literacy, financing etc.); (ii) Support to Regional Development Plans and their Implementation: This activity would build on existing experience with participatory development plans at the local level in Haiti. The plans have multiple objectives: economic growth, 8 education, health, land-use, risk mitigation, etc.) and can offer an ideal engine for the sequencing of multi-sectoral interventions identified in the present study. There are about 10 existing regional studies that are ready for evaluation and increased sector- specific design work; (iii) Increased Funding in the Rural Space: A key concern in implementing specific intervention is the provision of relatively sustainable sources of funding to the rural sector. Two interventions are suggested: (i) promotion of private investments through public sector support to “partnerships” between small producers and the buyers of their products; and (ii) the establishment of an environmental endowment fund that would provide steady compensation to rural inhabitants for their efforts in implementing regional development plans that promote conservation and sustainable land use. 9 A. STUDY OBJECTIVES 1. The circumstances of donor reengagement in Haiti : A year ago (2004), Haiti’s interim government issued an appeal to the international community to substantially increase its development assistance. For the World Bank and other external assistance institutions, this was an opportunity to re-engage in one of the poorest countries in the world after about three years of absence. The joint action that was formally launched with the Interim Cooperation Framework (ICF) in May 2004 recommended two types of activities: actions for immediate relief and employment generation; and assistance to the Interim Government in defining strategies and investment programs for medium- to long- term development and growth. For demographic and economic reasons, development of the rural space is of particular importance to Haiti and the Interim Government requested assistance in defining its strategic directions and priorities in rural and agricultural development for the medium to longer term. The study reported here is in response to this request and was undertaken in partnership between the Interim Government, the World Bank, the IADB and members of the Sectoral Table on rural development of the ICF. Its timeframe extends into the post-ICF phase, including the definition of a comprehensive poverty reduction strategy currently under preparation through a PRSP process. 2. The overall objective of the present study was to contribute to the knowledge- base that is urgently required for the implementation of sustainable rural development activities in Haiti. It concentrated on the following two objectives: • Update knowledge and produce a series of maps of regional physical socio- economic and institutional characteristics of the rural sector at a reasonable level of spatial disaggregation to improve targeting of future interventions; • Test and build consensus around specific priority recommendations of the ICF with respect to the regional dimension of growth and poverty alleviation. 3. The method that was followed in this study to reach the above objectives is described in Annex 3 and was designed around the following principles: ownership : the work was defined and undertaken in close collaboration with a local Steering Committee convened by the Ministry of Agriculture Natural Resources and Rural Development (MARNDR); partnership : the Task Team worked in close collaboration with members and leaders of the Sectoral Table on rural development of the ICF mechanism. Two members of IADB –focal point of the Sectoral Table—were members of the Study team; participation : the Study included two levels of participation beyond formal institutions. First, a survey of representative communities was organized through trained surveyors and helped “ground truth” some of the emerging hypotheses and ensure that there was a “listening” element to the study. Second, a series of workshops were organized on the various themes of the study. Members of civil society were invited at these workshops and assisted the Team in diagnosing issues, identifying institutional and governance deficiencies, extracting lessons from past experience, and discussing some of the 10 recommendations; integrated approach : the study has a multi-sectoral starting point as it first establishes the determinants of rural poverty before studying the strategies—whether agricultural or not—that households use to come out of poverty and that could be supported by Government policies and external assistance. Although specific interventions are not proposed for each key sector, the approach of the study should allow to integrate the sector-specific recommendations of this study in an overall strategy on rural development that needs to be multi-sectoral by design; focused on results : in line with the Government’s directive as well as the Bank’s guidance on the need to ensure a concrete output to the study, results were analyzed at two levels: (i) a geographic level— where diagnosis of rural poverty and potential of rural growth was disaggregated on a spatial level to assist in the specificity of recommendations for rural development that may vary from region to region, and (ii) an operational level —where selected investment opportunities are identified as “models” of possible interventions that would need further preparation and design if the consensus persists around the diagnosis and proposed interventions. 4. Poverty alleviation and Economic growth: The study follows a dual path of interest in both poverty alleviation as well as economic growth potential. It is widely recognized that in countries like Haiti with engrained and widespread inequality, it is often impossible to abate poverty through growth strategies exclusively. To be realistic, therefore, policy and investment responses to rural needs have to support households’ intrinsic strategies for getting out of poverty. 5. The study uses a conceptual framework related to the a sset-based approach as a way to simultaneously consider aspects of both poverty and growth. In particular, new household survey data made available by the Enquête sur les Conditions de Vie en Haiti- 2001) was combined with other collected data to analyze the following aspects of rural society and the economy: assets (productive, social, location-specific) at the disposal of rural populations; the context (policies, institutions, risks) in which these assets are used; the livelihoods strategies adopted to survive and thrive; and the outcomes of these strategies with respect to household well-being. Ultimately, recommended policies and investments would at least have to take household assets and livelihood strategies into consideration in order to be relevant to Haiti and have the required impact. 11 B. DIAGNOSIS C OUNTRY B ACKGROUND AND T RENDS : 6. Physical and Administrative Settings : Haiti is located in the Caribbean, on the western one-third of the island of Hispanola, which it shares with the Dominican Republic. The total land area is 27,560 square kilometers with mostly rough and mountainous terrain. The climate is mostly tropical with high rainfall, but semi-arid in some coastal areas that experience periodic droughts. Haiti lies in the middle of the hurricane belt of the Caribbean and is subject to severe storms from June to October, with recurrent flooding as a result. There has been extensive deforestation in Haiti, with much of the forested land being cleared for agriculture and for wood to be used as lumber and as fuel. For administrative purposes, Haiti is divided into 9 départements and 136 communes. Each of the communes is divided into sections communales. The smallest administrative entity is the section rurale. 7. Haiti’s population : With 306 inhabitants per sq. km, Haiti is the second most densely populated country in the LAC region and it continues to grow at a rate of 2.2 percent per year (see maps no.1 and no.2). As is clear in these two maps, total population per commune and population density per commune are unevenly distributed throughout Haiti. As expected, total population and population density are lowest in the extreme southwest and southeast communes of the country – where there is a prevalence of high elevation areas and lack of roads and other infrastructure. 8. Haiti is a predominantly rural country , with almost 60% of its population living in areas classified as rural. Although the Ouest Department is mostly urbanized, with over 60% of its residents classified as urban, it accounts for over 1 million rural residents, or about 22% of all rural residents in Haiti. Another 17% of Haiti’s rural residents live in the Artibonite Department. The departments, with over 80% of their residents being rural (Centre, Grande-Anse, Sud, Sud-Est), each have about 10% of Haiti’s total rural residents. Besides being predominantly rural, Haiti lacks major cities spread throughout the country (see table 2). Of the largest 10 cities, with populations over 30,000, Port-au-Prince, Carrefour, Delmas and Petionville are all part of the capital’s extended metropolitan area of about 1.6 million persons (about 20% of Haiti’s total population). Of the other major cities, three are found in Arbonite (Gonaives, Saint- Marc, Verrettes), and one each in Nord (Cap-Haitien), Sud (Les Cayes) and Nord-Ouest (Port-de-Paix). 12 Table 1: Population and Poverty by Department Department # of Communes Population Share of Total Population Share of Rural Population In Dept Rural Population Share of Rural Pop Artibonite 14 1,070,397 13.4% 74.0% 792,094 16.7% Centre 12 565,043 7.1% 83.9% 474,071 10.1% Grande-Anse 20 603,895 7.6% 85.1% 513,915 10.9% Nord 20 773,546 9.8% 61.8% 478,051 10.1% Nord-Est 13 300,493 3.8% 62.5% 187,808 4.0% Nord-Quest 13 445,080 5.6% 77.0% 342,712 7.2% Quest 17 3,093,699 39.0% 33.1% 1,024,014 21.6% Sud 20 627,311 7.9% 84.3% 528,823 11.1% Sud-Est 10 449,585 5.7% 85.4% 383,946 8.1% Total 136 7,929,049 100% 59.6% 4,725,713 100% Source: Population, 2003 Census. C HARACTERISTICS OF P OVERTY 9. Haiti has one of the lowest sets of development indicators in the world. The achievement of the MDGs in Haiti is unlikely by 2015. In 2004, UNDP and the Haitian Government rated five goals as unlikely to be achieved (1. eradicate extreme poverty and hunger; 2. achieve universal primary education; 3. reduce child mortality; 4. improve maternal health; and 5. ensure environmental sustainability) and only two as possible (promote gender equality as well as combat HIV/Aids, malaria and other diseases). Additionally, data of the Haitian Statistical Institute, UNDP and FAFO indicate that for virtually all MDG indicators, rural areas are further than urban areas from achieving the objectives (see Objectifs du Millénaire pour le Développement en Haiti ). 10. Rural and urban degrees of extreme poverty: An in-depth analysis of poverty reveals not only the significance of location for poverty in terms of per capita income but also in terms of access to assets and services. At the regional level poverty is especially prevalent in the northeastern and northwestern regions. Analyses reveal that 49 percent of overall Haitian households live in extreme poverty (based on a US$1 per capita per a day extreme poverty line), and that can be broken down to 20%, 56%, and 58% of the households in metropolitan, urban, and rural areas, respectively,. 1 Most of the approximately 3.9 million indigents live in rural areas (2.7 million), while the remainder live in the metropolitan and other urban areas (1.2 million) (for further details, see also Paper 2). 11. There is significant variation in poverty rates among departments . Ouest has the lowest poverty rate (less than 30%), but also has about 24% of all Haiti’s poor people, because of the large population in the department. Together, the departments of Ouest 1 In order to comply with the data provided by the Household Survey this report investigates poverty at the household level with the poverty line being extreme, i.e. US$1 per day (indigents, which we distinguish from poor (less than 2$ a day)) – considering the individual level poverty is higher as poor families tend to be larger (65% indigents in rural areas on a per capita basis) 13 and Artibonte have about 40% of the poor. The highest poverty rate (80.3%) is in Nord- Est, but it also has the smallest population, so contains the smallest share (6.5%) of poor persons in Haiti (with similar shares to the Departments of Sud and Sud-Est). Table 2 Indigent Poverty Rate by Locality and Region, 2001 West South- east North North- east Arti- bonite Center South Grand- Anse North- west 28.9 56.6 62.7 80.3 58.6 55.6 63.0 60.8 65.0 Total Haiti Metro- politan Urban Rural 48.9 19.7 56.3 58.1 12. Another way to investigate the distribution of poverty is to examine poverty density. 2 We observe that there is high poverty density in the north of the country stretching from eastern Nord-Ouest through Nord and Nord-Est, and another high poverty density area in the western part of the country in some parts of Grande-Anse and Sud, and in Ouest round the Port-Au-Prince metropolitan area, and parts of Artibonite. Areas with lower poverty density include the western part of Nord-Ouest, western part of Grande-Anse and Sud, and eastern parts of Ouest. Many of these low poverty density areas are characterized by difficult terrain and lack of transport infrastructure, relatively low agricultural potential and high soil erosion risk. The majority of the population and a disproportionate concentration of the poor can be found in rural areas while the population of metropolitan (Port au Prince) and other urban areas is relatively better off. 3 However, the poverty density of the Port au Prince metropolitan and Cap Haitien (and some other) urban areas is relatively high. T HE R URAL E CONOMY 13. The Haitian economy and the rural sector : Haiti is one of the world’s poorest countries and recent trends have been alarming. Between 1980 and 2003, the economy declined by a real average annual rate of 0.82 percent (GDP in constant 1995 USD based on WDI 2004). In 2003, Haiti’s GDP amounted to US$2.8 billion (Paper 2). The country’s poor economic performance has mainly been due to political instability and a lack of investment across all sectors. In 2001-2002 the agricultural sector accounted for close to 30% of total GDP, down from almost 50% in the 1960’s and 34% in the 90’s (Paper 1). Nevertheless, agriculture continues to play a dominant role in the Haitian economy and accounts for around 50 percent of overall employment, 2/3 of employment in rural areas, and 3/4 of employment for the poor. Industry, on the other hand, accounts for 16.3 percent of GDP, and only around 10 percent of jobs. With respect to trade, in 2 The poverty density rate combines the poverty rate (%) and the population density (persons per square km). Using poverty rates by department and population density by commune we present poverty density per commune (using the departmental-wide poverty rates). 3 An important aspect to keep in mind is that the most reliable data on the situation that Haitian household find themselves in, the first Living Conditions Survey, dates back to 2001. With regard to the continuously decreasing GDP rates per capita over the past years that were also shaped by political instability and a lack of public services/investment, the overall situation has certainly not improved but rather worsened for the Haitian population. 14 2002 agriculture exports amounted to US$ 20million and represented 7% of total exports (Paper 1). The main export crops were mangoes, cocoa, essential oils, and coffee. Imports of agriculture products, on the other hand, add up to US$ 234 million (2002), consisting mainly of rice, dairy products, wheat, sugar and others. This amounts to 85% of total export revenues that are used for the purchase of food products. Food imports account for 25% of total imports. 14. Underlying factors for the decline of agriculture : There are a number of interlinked and reinforcing factors that contribute to the decline of the rural sector in Haiti. Agricultural output has suffered from a growing population farming a finite area of land. The result has been the division of cultivated land into smaller and smaller plots, so that by the 1990s, 78 percent of Haiti's farms had an average size of less than two hectares, with significant differences in land pressure by Department (see map 3- Average Farm Size by Department) (Paper 2). Table 3: Land Distribution by Plot Size in Haiti, 2001 (percent) Arti- bonite Center Grand- Anse North North- east North- west West South South- east Total Haiti 0-0.5 ha 22.5 12.7 14.0 42.0 23.4 16.3 18.5 27.6 19.6 21.5 0.5-1 ha 32.7 25.8 27.5 28.4 33.0 26.5 31.1 28.2 25.4 28.6 1-2 ha 26.6 32.8 28.4 18.0 25.9 31.6 24.7 27.8 30.3 27.6 2-4 ha 11.2 19.7 13.1 7.6 11.7 15.9 15.7 9.8 17.3 13.7 4-7 ha 2.7 5.2 10.2 2.0 3.6 5.9 4.9 4.4 4.7 4.9 7-10 ha 1.7 2.0 3.2 1.0 2.5 2.1 2.4 1.9 1.3 2.0 10-20 ha 1.5 1.7 2.7 0.8 0.0 1.5 1.8 0.2 0.4 1.3 > 20 ha 1.0 0.2 0.9 0.3 0.0 0.2 0.9 0.2 0.9 0.6 Source: Own calculations based on HLCS 2001. On these tiny farms, the soil has become progressively exhausted and less productive. This problem has been compounded by the extensive deforestation of the country which, in turn, has led to the severe erosion of fertile topsoil, with an annual loss of 3 centimeters of top soil per year. This decline in soil productivity was one of the causes of a gradual decrease of agriculture production estimated at about 0.5 - 1.2% per year over the last ten years. 15. Factors at the individual household level: Over the years, Haitian smallholders have found themselves locked into a self-destructive cycle in which the cutting of trees for charcoal production, and the farming of land higher up the mountainsides, can stave off short term financial disaster, but only create greater problems for the sector as a whole in the long term. Moreover, the agricultural sector is characterized by a lack of access to capital needed for physical goods such as tools, machines, fertilizers, transportation, and infrastructure - with some variations by Department (see map 4 and table 2). While there is no public support in providing investment, private investment is also hampered by weak rural institutions and lack of credit. Because of the poor state of the rural transport infrastructure, it is now often cheaper to bring imports to rural towns than to collect and transport local products. Hence new trading patterns have developed in competition with the rural agricultural economy. These new trading patterns might be efficient given 15 constraints of poor infrastructure, but this situation might change significantly with improved infrastructure and other type of support to local producers. 16. Factors related to land degradation : As highlighted above, there are a number of structural impediments to the development of the rural sector and to increasing the productivity of the agricultural sector in particular. However, there is potential to remove many of these constraining factors by addressing them directly through various interventions. Selected proposals for such interventions are presented below. From an agro-ecological stand point, the present status of low land productivity is not irreversible, at least in some areas of the country. While deforestation and soil erosion proceeds, and the condition of the Haitian environment is alarming, pilot projects in agroforestry (such as CIDA project in Nippes), in supporting hillside agriculture (USAID) and in watershed management (FAO in Marmelade, Artibonite) - albeit on a micro level- show that environmental conditions allow the increase of agricultural productivity. 17. The agro-ecological zones that can be found in Haiti provide potential for a variety of cultures that have the potential for triggering productivity and agricultural development through production for the international and domestic market. In the Southern department around the plains of Les Cayes, research and diversification of vegetable and tuber crops, combined with inputs and fertilization techniques have permitted to increase production to three annual cycles with yields of about 3 metric tons/ha/cycle. The increased application of techniques such as grafting for mango trees and the establishment of supply chains for export of products such as essential oils, mangos and coffee show that their is potential for synergies of different actors to increase production in the sector. In hillside areas there have been successful projects by USAID, FAO and others (re)introducing agroforestry and coffee. This aspect will be discussed in more detail below. 18. Factors on the macroeconomic level play a key role in the outlook for rural development. One important context - defining element is institutional, including policies and their supporting instruments. In 1986, and then in 1994, Haiti, on the advice of the donor community - including the World Bank - implemented profound trade liberalization reforms but without the implementation of complementary interventions such as the gradual introduction of reforms and the supply of commensurate increases of support to farmers during the transition phase. During the embargo between 1991 and 1994 the Haitian farmers had suffered from decapitalization and were not prepared for the liberalization of their sector. The impact was dramatic and farmers have not yet recovered from this process of rapid liberalization, as production of agricultural goods such as rice and coffee have continuously decreased and were replaced by imports (see table 4). Additionally, a lack of social safety nets contributed to a rural exodus throughout the 1990s. 16 Table 4. : Agricultural Production (in ‘000 tons / head) PRODUIT 1970 1980 1990 2000 Mais 240 180 163 182 Riz 53 80 87 76 Sorgho 210 121 68 91 Légumineuses 83 85 99 75 café 24 43 37 25 Sucre (canne) 4.230 5.642 1 500 800 Coton 4 6 -- -- Racines et tubercules 592 690 770 770 Bananes et plantains 395 500 530 612 Cheptel bovin 800 Cheptel porcin 1.500 0 1.000 Cheptel ovin/caprin 1.500 Sources : FAO ; CNSA (2000) 19. However, the country’s agriculture policy framework also provides some incentives and potential as a result of liberalization, as it has few distortions (no input subsidies, no import quotas, low tariffs, etc.). Current market conditions, in fact, are largely favorable for Haitian agriculture since urban domestic demand for non-tradables is strong, there exist growing outlets for niche products on the international market and the substitution of imports from the Dominican Republic offers good prospects. Today informal trade of products such as coffee, avocados and mangoes with the DR accounts for 13 Million US Dollars (See papers 1 and 3). 20. Producers’ Associations: Strong associations are important for linking production to markets as modern markets are not well equipped to deal with atomized producers. Haiti has very weak farmer associations and associative institutions. This may be related to the weak legal framework but it is also closely associated to the farming system itself: to spread the crop and price risk, farmers diversify their crops and produce “a little of everything.” This approach contrasts the requirements of markets that want large and regular quantities. Furthermore, in farming systems where farmers have a substantial stake in one or two crops, it becomes worthwhile for them to have a strong farmer association as too much of their income depends on the good functioning of such associations (Paper 4). 21. Rural governance : the democratic 1987 constitution provided for a local governance system ( collectivités territoriales) with elected deliberative and executive bodies at all levels ( section communale, commune, département, national.) While operational on the local level, the structure has never been fully implemented in practice. For example, none of the anticipated departmental or national bodies of the collectivités territoriales have been operational, creating a significant gap in the anticipated transmission channels between the local and central levels of government. Moreover, peasant political activism since the 1980’s has not resulted yet in a strong voice for rural and peasant-based advocacy organizations in national politics today, reinforcing the traditional pattern or rural-urban disconnect that underlies previous development neglect 17 vis-à-vis the rural areas. The result is a very weak presence of formal institutions in rural areas in support of key services such as water services, irrigation systems and natural resources management. Furthermore, communities and individual are often incapable of enforcing the rule of law in the absence of formal institutions at the local level. 22. But the relative absence of public sector institutions at the local level is compensated somewhat by an institutional environment that is many times informal, diverse, but surprisingly dense in some regions. While the surveyed communities with high agricultural potential (e.g. Laborde, Roche Plate) had several ongoing agricultural support projects, these were practically non-existing in low potential areas in the north and north-west (Port Margot, Baie de Henne). There, development projects instead focus only on safety nets, to the dismay of many respondents. (for further details, see Paper 5) 23. The institutional environment , even if informal is decisive for rural livelihoods as social capital has been shown to increase the probability of Haitian households to fall into poverty. In particular, being member of an organization reduces the probability of being poor. (Paper 2, table 8.1) While rural governance reforms have established the formal framework and partly the administrative structures for enhanced local participation, the capacity of the central government to drive rural development is anticipated to be in line with the historical average in the foreseeable future, with significant risks of periodic setbacks. 24. Yet enhanced public sector involvement is likely indispensable to achieve higher levels, stability, and predictability in the provision of services and public goods and should therefore be supported. Such support should be designed in a way that is based on realistic assumptions of state capacity in order to achieve sustainability. Continuing strong social cohesion, high awareness of the need for agricultural inputs, adaptive capacity, and market orientation, are factors on which development interventions can build—even under conditions of precarious security as is presently prevalent in Haiti. 25. However, a further deterioration of the security situation is always possible and could render situations of relative success into complete failures. This report does not have specific recommendations on the overall security situation in Haiti—this is the subject of a dedicated “sectoral table” within the ICF. R URAL H OUSEHOLDS , THEIR WELL - BEING , A SSETS , AND L IVELIHOOD S TRATEGIES : Measures of Rural Incomes 26. Rural auto-consumption is important for the very poor. A detailed analysis of incomes is presented in Paper 2, some of the salient findings are presented here. Excluding the Port-au-Prince metropolitan area, rural households are better off than urban households in the low end of income distribution, indicating a high degree of self- consumption in rural households. With respect to income sources, the rural poor receive the largest share of their total income from agricultural activities such as farming and agricultural labor. Rural dwellers also work as laborers in the off-farm and non-farm 18 sectors 4 , receiving about 26-34% of their income that way. Remittances from urban areas and abroad account for about 14% of the poor households’ income, slightly less that the non-poor’s income. Median income greatly varies across regions and locations. In 2001, households with lowest median income per capita were located in the Northeast department. In the West department (excluding the Port au Prince metropolitan area), households experienced a median income 5-6 times higher than in the Northeast department. Access to a large market such as Port au Prince can make a difference in households’ income. Other Measures of Well-being 27. Social indicators for poverty: The level of wellbeing in Haiti can also be measured by social indicators such as adult illiteracy, infant mortality and malnutrition; that are all high. One revealing piece of good news is that during 1970-2000 the adult illiteracy rate fell sharply from 78.0% to 39.5% (Paper 5). However, female illiteracy rate is higher than for the males (43.3% vs. 33.4% in 2000). The infant mortality rate has also improved but remains quite high at 79 per 1,000 live births in 2002. Life expectancy has increased during the last three decades in Haiti, but has recently decreased because of AIDS (with the highest incidence outside Africa). Life expectancy was 52 years in 2002 (compared to a high of 54 years in 1997). With respect to malnutrition, there also, the numbers have improved, but Haiti’s rate of child malnutrition remains significantly higher than the Caribbean as a whole, (17.3 and 22.7% depending on specific indicator, vs. 9% for the Caribbean.) Child malnutrition is thought to be principally due to income poverty, low access to quality water, micro nutrients deficiency, and absence of general healthcare. 28. Fecundity: Measured as the number of children per mother, fecundity dropped fast in recent decades. During the three decades leading to the 1990’s the fertility rate fell around one percentage point 6.3 in 1960 to 5.4 in 1990, then the rate decreased faster and reached 4.4 in 2000 (see Paper 5 for more details). However, this rate remains quite high and causes population increases that negate the possible gains from development interventions and improved overall conditions of the rural poor. A typical extremely poor rural family has on average about twice as many children as does a non poor family. Rural Assets in Haiti: 29. The rural economy is characterized by inequality of assets. In this section, we review the various assets that are significant for the rural poor in Haiti. These assets include productive, social and locational assets. The study found a diverse and stratified rural economy, with high inequalitie