By: Matt Peppe
It has been more than a year since the historic referendum in which fifty-four percent of Puerto Rico voters rejected their current political status. This fact barely registered in the mainland U.S. Thus, Puerto Ricans are still dealing with policies from Washington that they have no vote in deciding. Here I discuss two issues that illustrate the detrimental effects of Puerto Rico’s current status on its economy.
The first is the inability to import rice seeds suited for it’s climate. A sad irony is that on an island perfect for growing many fruits and vegetables, Puerto Rico imports 85% of its foodstuffs. It’s common at the supermarket to see plantains from the Dominican Republic and avocados from México. That is merely a fraction of the corn, poultry, cereals and root vegetables that are imported, mostly from the United States.
Several months ago a delegation from the Puerto Rican government took a trip to the Dominican Republic to discuss a pilot project there to grow a grain of rice that is specially suited for a tropical climate. “The Dominican seeds were recommended by agronomists from that country, which is self-sufficient in rice production, because they are acclimated to the inclemency of the weather and the conditions of the terrain in the Caribbean,” ex-secretary of Agriculture Luis Rivero Cubano, now head of a group dedicated to fostering innovation and development in agriculture, told Primerahora.com.
The program could help bring a food staple that is found on every dinner plate in Puerto Rico to the island itself, rather than having to import it from abroad. The Primerahora.com article goes on to explain how such efforts are part of a worldwide trend of countries looking to create sovereignty in food production.
But when the Puerto Rican delegation brought home the Dominican seeds they were not able to get past the paternal frisk of Uncle Sam. The U.S. customs agents did not allow the seeds to enter because of USDA prohibitions. Unable to move forward with the anticipated project, the government was forced to import seeds from the state of Texas.
The second issue at hand is Puerto Rico’s milk production. If Puerto Rico fails to produce most basic foodstuffs for its population’s consumption, there is one area where they have managed to succeed: milk. “Puerto Rico is the country with the most cattle per capita in the world. The production of milk is the only area of the food industry where we are self-sufficient. In fact, we produce more milk than we need, so that with the leftovers we can make other derivatives of milk,” writes Héctor Pesquera Sevillano.
The production of milk comes from local farmers. The farmers sell their milk to private companies which then process and distribute it to supermarkets and grocery stores. The government agency overseeing the industry, Oficina Reglamentación de la Industria Lechera (ORIL), determines how much the processors must pay the producers. Additionally, to maintain a steady supply and ensure that what is not being consumed does not go to waste, unsold milk is directed to the company INDULAC to produce ultra-high temperature (UHT) milk, cheese and other milk-based products.
But the for-profit processors have always been eager to get a larger slice of the pie. They can bring UHT milk from the mainland to earn a bigger profit. With tougher regulations on UHT milk from the U.S., the processors see their advantages further reduced by dramatic cost increases.
Producers of UHT milk complained that this violated their protection under the Interstate Commerce Clause. That’s right: Puerto Rico has to compete equally with the rest of the states. A federal judge in Puerto Rico agreed with the processors, blocking Puerto Rico from enforcing the regulations. This lowered the cost of UHT milk. Cash-strapped grocery shoppers have to pay more for fresh local milk or succumb to the savings of imported box milk.
The court also struck down ORIL’s formula for determining how to up divvy up proceeds from milk sales. An appeals court in Boston upheld the decision, striking what could turn out to be a death blow against fresh milk. “In my opinion, fresh milk being a product of leading necessity in the hands of a virtual foreign monopoly, the processing and distribution of milk should be nationalized,” Pesquera writes.
The U.S. itself developed its economy in the early post-revolutionary years by protecting its own industries such as cotton. Noam Chomsky explains how in the early 19th century, the United States and Egypt had similar economies that were poised to develop rapidly:
“There was one fundamental difference between Egypt and the United States, namely the United States gained independence and it was therefore free to ignore the prescriptions of economic theory,” Chomsky writes. “They were free to follow England’s own course of independent state-guided development with high tariffs to protect industry from superior British exports, the first textiles and later steel and others, and a wide variety of other modes of state intervention in order to accelerate economic development.”
Puerto Rico today finds itself in a similar position as Egypt two hundred years ago. Without the ability to control its own economy, it’s hard to imagine a way for Puerto Rico to develop on its own terms.
Matt Peppe has a Master’s degree in public administration from the Rockefeller College of Public Affairs & Policy at SUNY Albany. He lives in New York with his wife Elisa, a native of Cayey, Puerto Rico. You can follow him on twitter or read his blog.