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Dominican Republic Crops
Cash Crops
Despite ongoing diversification efforts, in the late
1980s
the Dominican Republic continued to be the world's fourth
largest
producer of sugarcane. The sugar industry influenced all
sectors
of the economy and epitomized the nation's vulnerability
to
outside forces. Fluctuating world prices, adjustments to
United
States sugar quotas, and the actions of United States
sugar
companies (such as Gulf and Western Corporation's sale of
all its
Dominican holdings in 1985) all could determine the pace
of
economic development for decades.
Columbus introduced sugarcane to Hispaniola, but sugar
plantations did not flourish in the Dominican Republic
until the
1870s, much later than on most Caribbean islands.
Investment by
United States sugar companies, such as the United States
South
Porto Rico Company and the Cuban-Dominican Sugar Company,
rapidly
transformed the Dominican economy. These companies had
established themselves by the 1890s, and between 1896 and
1905
sugar output tripled. During the United States occupation
(1916-
24), the sugar industry expanded further, acquiring
control of
major banking and transportation enterprises.
Trujillo constructed a string of sugar mills, many of
which
he owned personally, beginning in 1948. The elimination of
United
States sugar quotas for Cuba after the Cuban Revolution of
1959
further enhanced the economic role of sugar, as the
Dominican
Republic assumed Cuba's former status as the main supplier
under
the quota system.
Heavy reliance on sugar created a number of economic
difficulties. The harvest of sugarcane, the zafra,
is
arduous, labor-intensive, and seasonal, and it leaves many
unemployed during the tiempo muerto, or dead
season.
Haitian laborers have harvested most of the Dominican cane
crop
since the late nineteenth century, by agreement between
Hispaniola's two governments. Although Haitian cane
cutters lived
under conditions of virtual slavery
(see Dominican Republic - Haitians
, ch. 2;
Dominican Republic - Migration
, ch. 7), two factors continued to draw them
across the
border: depressed economic conditions in Haiti and the
reluctance
of Dominicans to perform the backbreaking, poorly regarded
work
of cane cutting.
After the death of Trujillo, Dominican policy makers
faced
the sensitive issue of how best to manage the dictator's
economic
legacy, which on the one hand was the rightful property of
the
people, but on the other hand represented more of a drain
on
national finances than a catalyst to development. These
contradictions played themselves out within the CEA, an
entrenched, politicized, and inefficient parastatal.
The role of sugar changed markedly in the 1980s as
external
conditions forced the national economy to diversify. Sugar
prices
had reached unprecedented highs in 1975 and again in 1979.
The
international recession of the early 1980s, however,
pushed
prices to their lowest level in forty years. Lower world
prices
hurt the Dominican economy, but the reduction of sales to
the
United States market, as a result of quota reductions that
began
in 1981, was even more costly because of the preferential
price
the United States paid under the quota system. The
international
market continued to be unpromising in the late 1980s. The
market
had been glutted by over-production, caused principally by
European beet growers; major soft-drink manufacturers had
also
begun to turn to high-fructose corn sweeteners and away
from cane
sugar.
In the late 1980s, the CEA continued to control about
60
percent of national sugar output through the ownership of
twelve
of the country's sixteen sugar mills, employment of a work
force
of 35,000, and possession of 233,000 hectares of land,
only
100,000 hectares of which were sown with sugarcane.
Governed by a
board--the members of which were drawn from the public
sector,
labor, and the private sector--the CEA operated at a
financial
loss and at lower productivity than the two major private
sugar
companies, Casa Vicini and Central Romana. Besides these
major
producers, thousands of small farmers (colonos)
also grew
cane. Sugar from all properties covered an estimated
240,000
hectares in 1987, and it yielded 816,000 tons, well below
the
1.25 million tons harvested in 1976, the year of peak
volume.
Worse yet, lower prices kept 1987 sales at less than
one-third of
what was realized in 1975, when sugar export revenues
peaked at
US$577 million. The Dominican Republic still exported
about half
its sugar to the United States in the late 1980s (but,
unlike in
the past, not all under the quota system with its
preferential
prices). The Soviet Union became the second largest
purchaser of
Dominican sugar, following the signing of a three-year
bilateral
agreement in 1987.
Coffee, the second leading cash crop, was also subject
to
varying market conditions in the 1980s. Introduced as
early as
1715, coffee continued to be a leading crop among small
hillside
farmers in the late 1980s; it covered 152,000 hectares
throughout
various mountain ranges. Coffee farming, like sugar
growing, was
seasonal, and it entailed a labor-intensive harvest
involving as
many as 250,000 workers, some of whom were Haitians. The
preponderance of small holdings among Dominican coffee
farmers,
however, caused the coffee industry to be inefficient, and
yields
fell far below the island's potential. Output of coffee
fluctuated with world prices, which reached an eight-year
low in
1989. Another problem was the coffee bushes' vulnerability
to the
hurricanes that periodically ravaged the island.
The Dominican coffee industry faced not only national
problems, but also international ones, which resulted
mainly from
the failure of the International Coffee Organization (ICO)
to
agree on quotas through its International Coffee Agreement
(ICA).
As a consequence, the Dominicans' ICA quota dropped
several times
late in the decade, hitting a low of 425,187
sixty-kilogram bags
by 1988. Although Dominicans consumed much of their own
coffee,
they were increasingly forced to find new foreign markets
because
of the ICO's difficulties. As was true of many Dominican
commodities, middlemen often smuggled coffee into Haiti
for re-
export overseas. Official coffee exports in 1987 were
US$63
million, down from US$86 million in 1985 and US$113
million in
1986.
Cacao, the bean from which cocoa is derived, endured as
another principal cash crop, occasionally surpassing
coffee as a
source of export revenue. The Dominican cocoa industry
emerged in
the 1880s as a competing peasant crop, when tobacco
underwent a
steep price decline. Although overshadowed by sugar, cocoa
agriculture enjoyed slow, but steady, growth until a
period of
rapid expansion in the 1970s. In response to higher world
prices,
the area covered with cacao trees grew from 65,000
hectares in
1971 to 117,000 hectares by 1980. Small farmers cultivated
the
most cacao, producing some 40,000 tons on approximately
134,000
hectares in 1987. This crop was enough to make the
Dominican
Republic the largest producer of cacao in the Caribbean.
Combined
cacao and cocoa exports in 1987 reached US$66 million.
Despite
the brisk growth in the crop, the Dominican cocoa industry
suffered from low yields and from increasing
quality-control
problems. In addition, three exporters controlled 75
percent of
all cocoa, thus limiting competition. The country also
forfeited
greater foreign-exchange earnings because only a small
portion of
the crop was processed into cocoa before export.
Tobacco enjoyed a renaissance in the 1960s, with the
introduction of new varieties and an increase in prices.
Sales
revenues peaked in 1978, but they declined considerably in
the
1980s because of lower prices, disease, and inadequate
marketing.
In 1987, 23,000 hectares yielded 23,000 tons of tobacco.
Black
tobacco of the "dark air-cured and sun-cured" variety
represented
88 percent of national production in the late 1980s.
Manufactured
into cigars for export, black tobacco was the foremost
foreign-
exchange earner among the various strains of the crop
grown in
the Dominican Republic.
Numerous companies participated in the export of black
tobacco. Sales to Spain, the United States, the Federal
Republic
of Germany (West Germany), and France totaled US$14
million in
1987. A growing number of cigar companies operated out of
the
country's burgeoning free zones, registering US$26 million
in
sales in 1987.
Declining prices and structural changes in the
international
market for the Dominican Republic's traditional cash crops
of
sugar, coffee, cocoa, and tobacco forced the government to
consider opportunities for nontraditional agricultural
exports
during the 1980s. This new emphasis on nontraditional
exports
also coincided with the implementation of the Caribbean
Basin
Initiative (CBI), which afforded the country
reduced-tariff
access to the United States market. The main categories of
nontraditional exports that the government promoted
included
ornamental plants, winter vegetables (vegetables not grown
in the
United States during winter months), citrus, tropical
fruits,
spices, nuts, and certain types of produce popular among
the
growing Hispanic and Caribbean populations in the United
States.
However, new investments in agribusiness during the 1980s
were
less successful than anticipated, particularly in
comparison to
the dramatic success of assembly manufacturing and
tourism.
Nonetheless, officials apparently had succeeded in
broadening the
options of farmers and investors from a few crops to a
diverse
range of products. The government spearheaded agricultural
diversification through an export promotion agency, the
Dominican
Center for the Promotion of Exports (Centro Dominicano de
Promoción de Exportaciones--Cedopex), and through
cooperation
with a nongovernmental organization, the Joint
Agricultural
Consultative Committee, which promoted agribusiness
investment in
the republic. By 1989 some successes had been achieved
with
citrus and pineapples, but quicker growth in
nontraditional
agricultural exports was hindered by the slow pace of the
CEA's
diversification program, which had scheduled portions of
the
fertile sugar plains for conversion to nontraditional crop
production.
Data as of December 1989
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