Haiti - Agricultural sector study (Vol. 2 of 3) : Annexes A - F

Do =uMt Of The World Bank FOR OMCUL USE ONLY lRept No- 5375-E1 HATTI AGRICULTURAL SECTOR STUDY VOLUME II ANNEES A - F June 14, 1985 Projects Department Latin America and the Caribbean Regional Office I This d=c_me. ha a ieslucfd dhltlua amd may be wed by rcdpuecft only in t p thr odal dut los as l utM =y not odtlwis be dsloed witho Wol Bank authu m  CURRENCY EQUIVALENTS Currency Unit: Gourde (G) US$1.00 - G 51/ G 1.00 = US$0.20 WEIGHTS AND MEASURES Metric System 1 kilogram (Yg) = 2.2 pounds (lb) I hectare = 0.78 carreaux I carreau = 1.29 hectares ACRONYMS BCA = Agricultural Credit Bureau BNC = National Credit Bank BNDAI = National Bank for Agricultural and Industrial Development BRE = Bank of the Republic of Haiti (Central Bank) CCSA = Capital Consult S.A. CEPAL = Economic Commission for Latin America CPI = Consumer Price Index CIF = Cost, Insurance and Freight CRDA = Center for Agricultural Research and Documentation FAC = French Fund for Aid and Cooperation FAO = Food and Agriculture Organization FAVM = Faculty of Agriculture and Veterinary Medicine HASCO = Haitian American Sugar Company ICO = International Coffee Organization IDB = Inter-American Development Bank IMF = International Monetary Fund IHS = Haitian Institute of Statistics MARNDR = Ministry of Agriculture, Natural Resources and Rural Development Minoterie = Flour Mill OAS Organization of American States OCEAH = Haitian Office for Marketing Aromatic Oils ODN = Organization for Development in the North ODVA = Organization for Development of the Artibonite Valley SENASA = National Service for Improved Seeds SODEXOL = Societe d'Exploitation d'Oleagineux UPAN = Agriculture and Nutrition Planning Unit, Ministry of Planning USAID = U.S. Agency for International Development USDA = U.S. Department of Agriculture USND = National Sugar Company of Darbonne (Leogane) USMN = National Sugar Company of the North (Citadelle) GOVERNMENT OF HAITI FISCAL YEAR October 1 - September 30 1/ Since 1919, the gourde has been pegged to the U.S. dollar at G 5 = US$1.  FOR OFFICIAL USE ONLY HAITI AGMICULTURAL SECTOR STUDY VOLUME II - ANNEXES A - F Page No. ANNEX A - SUGAR SUBSECTOR PROBLEM AREAS - DISCUSSION AND RECOMKENDATIONS .... .... 1 Discussion ........... .................................. I Recommendations ....................................... 7 Tables 1. Comparison of per Capita Sugar Consumption 2. Cane Production in the Four Main Areas 3. Comparison of Summarized Gross Margia Analyses in Cane Cultivation 4. Production Data and Performance Comparisons 5. Central Dessalines, Summarized Factory Data, 1981/4 6. Summarized Factory Data, 1983/4 7. Statement of Profit & Loss 8. Guildives: Geographical and Size Distribution, 1983 9. Capacity of the Clairin Industry, 1983 Data 10. Sugar Supply and Distribution 11. Sugar Price Structure, 1970 and 1980-84 12. Analysis of Retail Raw Sugar Price,-1970, 1976 and 1980-84 Figures 1. Sugarcane Ground and Sugar Produced 2. Centrale Citadelle Costs and Revenue at Differing Sugar Content in Cane 3. The Marketing Framework of Sugar 4. Sugar Production and Consumption | This document has a restricted distribution and may be used by recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Table of Contents - VOLUME II (Cont'd) Page No. ANNEX B - WHEAT FLOUR SUBSECTOR 1. THE MINOTERIE DHlAITI ................................. 25 Introduction .......................................... 25 History ............................................... 25 Management ............................................ 25 Technology and Capacity ...... ......................... 25 Products .............................................. 26 Flour Monopoly ........................................ 26 2. WHEAT IMPORTS ......................................... 26 Quantities ............................................ 26 Import Strategy ..................................... .. 26 3. FLOUR PRODUCTION .................................... .. 26 Production ............................................ 26 Milling Productivity .................................. 27 Processing Costs ....... ........... .. .................. 27 Strategy of Production ................ .. .............. 28 4. FLOUR SALE PRICE .................................... .. 29 Flour Prices ............. 29 Analysis of the Flour Price Structure ................ . 30 Differential Analysis between Sale Price and Estimated Imported Price ........... .. ........... 30 Price Policy ....................... ................... 31 5. SALES OF FLOUR ...................................... .. 31 Distribution .......................................... 31 Consumption ........................................... 32 Volume of Sales ....................................... 33 6. SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS ............ 33 Conclusions ........................................... 33 Sales and Sales Price ................................. 34 Recommendations ....... ............ .. .................. 34  - iii - Table of Contents - VOLUME II (Cont'd) ANNEX B - WHEAT FLOUR SUBSECTOR (Cont'd) Tables 1. Wheat Processed and PL 480 Importations, 1979-1983 2. Wheat Imports, 1982/83 3. Production and Extraction Rates, 1976-1983 4. Volume of Flour Imports and Unit Cost Prices, 1976-1983 5. Structure and Evolution of the Processing Costs per 100-lb Sack in US$ 6. Comparison of the-Cost of Flour Processed in Haiti with the Cost of Imported Flour 7. Relative Price Changes 8. Sales Price Structure and Evolution, 'Superior Flour- (1969-1984) 9. Price Comparison between Domestic Flour and Imported Flour 10. Flour Sale Costs and Revenues 11. Flour: Regional Division of Buyers 12. Evolution of Flour Sales and Prices Figures 1. Trends of Selling Price of Flour in Haiti and US Wheat Prices (f.o.b. Gulf) 2. Evolution of Flour Sales and Prices 3. Monthly Fluctuation in Flour Sales  - iv - Table of Contents - VOLUME II (Cont'd) Page No. ANNEX C - RESOURCE BASE AND AGRICULTURAL POTENTIAL 1. DESCRIPTION OF TERRITORY ..... ......................... 50 Land Areas and Their Use ..... ......................... 50 Property Structures ...... ............................. 50 Crop Areas and Characteristics of the Natural Setting . 51 Irrigation Systems .................................... 53 2. EMPLOYMENT ....................... ..................... 55 General Characteristics ..... .......................... 55 Crop Areas and Population Density ... 55 Arrangements for Payment of Labor ..................... 55 Daily Agricultural Wage ...... ......................... 56 Availability of Labor ...... ...................... j6 3. MEANS OF PRODUCTION .................. ................. 57 Land .................................................. 57 Water ................................................. 58 Mechanization ........ ................................. 60 Seeds, Fertilizer and Pesticides .......... .. .......... 61 Agricultural Credit .................. 61 4. CURRENT UTILIZATION OF HAITIAN AGRICULTURAL POTENTIAL . - 63 5. CONSTRAIiNTS ........................................... 65 General Constraints ................... ................ 65 Specific Constraints .................. ................ 66 APPENDICES 1 - Basic Data on Haitian Agriculture 2 - Medium-size Irrigation Systems 3 - Small-size Irrigation Systems 4 - Land Use in Farming Areas, 1930-40 5 - Groundwater in Haiti 6 - Saline (or (Alkaline) Soils in Haiti 7 - Fertilizer Imports (1975-80) 8 - Use of Agricultural Pesticides in Haiti 9 - Agricultural Losses due to Urban Growth  Table of Contents - VOLUME II (Cont'd) Page No. ANNEX D - TLE CRISIS IN HAITI'S SMALLHOLDER FARM ECONOMY ........ 79 1. INTRODUCTION .......................................... 79 2. HISTORICAL AND ECONOMIC CONDITIONS .................... 80 3. LAND OWNERSHIP, FARM SIZE AND TENURE ........ .. ........ 84 Land Ownership ........................................ 84 Size of Farms and Methods of Exploitation .... ......... 85 Forms of Exploitation ................................. 86 4. SOCIAL CONDITIONS AND ATTITUDES 07 THE RURAL POPULATION .......................................... 88 5. ON-FARM CONSUMPTION AND PRODUCTION, RELATIVE PRICES AND COMPETITION ..................... 89 6. SUMMARY AND CONCLUSIONS ............................... 93 Summary ............................................... 93 Conclusions and Recommendations ....................... 96 Price Policy .......................................... 98 Modernization ......................................... 98 APPENDIX  Table of Contents - VOLUME II (Cont'd) Page No. ANNEX E - AGRICULTURAL EXPORTS AND POTENTIAL 1. AGRICULTURAL AND TOTAL EXPORTS .......... .. ............ 100 Importance of the Sector .. . . 100 Export Decline ............ 101 2. COFFEE ........... ..................................... 101 Export Statistics ..................................... 101 Trends in Production .. .................. 102 Domestic Market ....................................... 102 External Market ....................................... 104 3. mANGOES ........... .................................... 104 Production ............................................ 104 The Domestic Market for the Francis Mango ............. 105 Exports and External Market ............ .. ............. 105 4. COCOA ........................................ 106 Production ............................................ 106 Exports and External Market ............... 106 Domestic Market ....................................... 107 5. SISAL ........................................... 107 6. ESSENTIAL OILS ........................................ 108 Vetiver Production ....... ............................. 108 Marketing ............................................. 109 Tables 1. Exports by Major Commodity Groups 1965-1983 2. Importance of Exports to GDP 3. Volume, Unit Price and Value of Principal Export Products 1974-1983 Figures 1. Coffee Marketing System 2. Francis Mango Distribution System for Export 3. Marketing Channel for Essential Oils  - vii - Table of Contents - VOLUME II (Cont'd) Page No. ANNEX F - AGRICULTURAL PRODUCTION, ITS COST STRUCTURE AND COMPARATIVE ADVANTAGE Production ............................................ 116 Methodologies ........................................ 116 Estimates of Production Costs ......................... 119 Estimates of Comparative Advantage ..... ............... 122 Tables 1 - Production, Area, and Yields of Principal Crops (1978) 2 - Comparative Annual Yields by Crop, 1978 3 - Maize: Costs of Production Estimates 4 - Rice: Costs of Production Estimates 5 - Coffee: Costs of Production Estimates, 1983 6 - Sugarcane: Recent Costs of Production Estimates 7 - Bananas: Costs of Production Estimates, 1982 8 - Comparative Advantage Indicators for Haitian Agriculture  HAITI ANNEX A AGRICULTURAL SECTOR STUDY SUGAR SUBSECTOR PROBLEM AREAS - DISCUSSION AND RECOMMENDATIONS1/ Dis cussion 1. During the past 15 years, Haiti's sugar subsector has experienced significant change. In spite of an increase in process capacity, production has fallen, eroding first the modest level of exports, and then turning Haiti into a net importer of sugar. The problem is fundamental in nature. This transformation cannot be considered the result of neglect by policy-makers, since the major justification advanced for the construction of the Government-owned mill at Leogane was that of avoiding the slide into a net import position. The major reversal does indicate, however, a confusion of contradictory policy measures which have treated the centrifugal sugar industry in an increasingly opportunistic manner while neglecting, almost completely, the potable cane-derived alcohol component of the sector. 2. Many farmers prefer to grow cane for a wide variety of reasons, not all of which can be quantified or identified in monetary terms. To the extent that cane will continue to be grown whatever the policy, it is logical to modify policy so that the cane is grown properly and efficiently. 3. Sugar consumption is very low, at present about 11.6 kg per capita per annum. Direct international comparisons are not necessarily helpful, but it is unusual for a sugar producing country to have such low levels of consumption, even allowing for the low level of CNP per capita. Table 1 shows Haiti's position with respect to other lower income countries of the region, although there is no direct comparison to Haiti in terms of GNP in the western hemisphere. In general terms, sugar is not playing the part it could in assisting to solve nutritional problems in Haiti. 4. The lack of support for the agricultural sector in general, and for cane production in particular, has resulted in a failure to take advantage of the productive capacity of the sector. Cane producers are locked into a low input/low output system and such a poor land productivity -policy' is a fundamental error in Haiti, given the limited arable land resources and population pressures on them. It is difficult to understand why that the relatively small areas of alluvial plains with their high productive capacity should have been almost totally neglected. At the same time, the poor development of these areas exacerbates the problems of increased cultivation of marginal lands, causing deforestation and soil erosion. When such damage occurs in the watersheds that feed the rivers that cross the plains, the resultant silting and flood damage reduces further their productive use. 1/ A more extensive Working Paper on this subsector is available in Regional Files.  -2- ANNEX A Page 2 5. The reduced supply of cane for centrifugal sugar production puts pressure on the production costs of the mills. Between 1970 and 1980, the share of the ex-factory sugar price between factory and farmer changed from 49/51 to 71/29. The disincentive effect of inadequate cane prices has caused a reduction in supply to the mills, which in turn has put pressure on unit costs, causing the mills to retain a higher proportion of the sugar revenues to maintain their profit levels. Since the mills represent a vocal lobby whereas the diffused mass of cane growers has no representational voice, the outcome is predictable. However, since the incorrect sharing arrangements and consequent low cane price cause the reduction in raw material supply, the arrazgement is self-defeating. Equilibrium will tend towards a low level of capacity utilization in the sugar industry and low cane yields on scarce land. The paradox is that at the support price of US$0.24 per lb for raw sugar, Haiti should have no difficulty achieving self-sufficiency and a margin for export, if the revenues were distributed properly. 6. The tax system is far from neutral with respect to the sugar sector. Minor taxes (e.g. ONAAC2/ deductions on cane) are applied at the cane production and mill stages. The major tax, however, is an excise tax of US$8 per bag, equivalent to US$10 million per year at a consumption level of 60,000 tons. In theory, the export and import taxes associated with the arbitrage of sugar in taking advantage of the US quota should provide a considerable amount of revenue. The export tax payable on the exports to the US amounts to some US$1.6 million, whereas the import duties on the total amount of sugar imported (to replace export sugar and augment the shortfall in production) would amount to between US$4.6 and US$7.6 million, depending on the quality and classification of the imported sugar. Allowing for a draw-back arrangement, this would net between US$3 and US$5 million. Recent data on export tax and import duty revenues are not available to compare with these estimated data. Ignoring the impact of import and export taxes, the foreign exchange value of the arbitrage opportunity with US quota sugar is between US$3-4 million per year at present prices. 7. In contrast to the revenue effect on the centrifugal sugar sector, the major user of cane is barely touched by taxes. Apart from an insignificant tax on process capacity, no revenue is raised from locally-produced potable alcohol (clairin), although a very modest excise tax is levied on rum. The paradox of refined sugar retailing at US$0.38 per lb and alcohol of 59 G.L. retailing at between US$3-4 per gal is difficult to explain. It is understood that the Government of Haiti has always been reluctant to tax clairin, but an excise duty of as little as US$1 per gal would generate more than the excise duty on sugar and would be amply justified on equity grounds. 8. A major divide exists between making recommendations for the sugar subsector and Dutting them into practice. This point was eloquently made by 2/ National Literacy and Community Action Office.  -3- ANNEX A Page 3 Lucie-Smith3/: "It is a simple matter to say that yields can be doubled by using appropriate varieties and fertilizers, proper irrigation and better agricultural practices, but there is no organization with the funds and facilities necessary to make the essential varietal, fertilizer, irrigation and agronomic trials and to extend the results to farmers. As long as these deficiencies continue, visits and reports by foreign experts will be without practical value." His recommendations were not new and are cited in earlier FAO and UNDP studies. 9. The decline of the sugar industry to the point at which Haiti would become a net importer was predieted in 1975 by Lucie-Smith and earlier by other observers. The response of the Government of Haiti was to promote the construction of a new factory in the Leogane plain, justifying it by arguing that additional capacity was essential to counter the increase in domestic sugar consumption. The factory began operating in 1984. It is difficult to understand how such a conclusion couldbe drawn from a proper analysis of the situation in the sugar subsector at that time, but it is easy to see how such a decision could be made. The construction of a new factory and the commitment of foreign exchange represent the simple option, compared to the magnitude of the changes necessary to solve the real problem: the lack of cane. Having decided to build Leogane, nothing was done to increase the quantity of cane available from Plaine de Leogane. Only now is this problem being tackled by the USND411, with investments in roads and irrigation infrastructure and limited varietal testing of cane. The Leogane project thus represents in microcosm the problems of the centrifugal sugar sector of Haiti, with the additional problem of its susbtantial foreign debt service and repayment obligations. 10. A wide range of actions and policy measures is necessary to solve the cane shortage. Basically they involve the incentives and means necessary to encourage and assist cane cultivation. In aggregate, the mills are proccesing cane at about 40% of capacity. The cane, morover, is poor in quality and often stale from transport problems. The potable alcohol industry uses most of the cane, but the production of clairin is entrenched in Haiti, and it would be a great mistake to try to prevent the guildives by law from operating in the areas of influence of the sugar mills in order to divert cane from alcohol to sugar production. Other policy measures, however, could be implemented to restrict the development of new guildives and improve the efficiency of existing ones. The increased use of molasses in fermentation could be encouraged and tax and revenue measures could be implemented that would serve to constrain the demand for clairin. II. The price received for cane is far too low a proportion of the ex-factory sugar price and there is no incentive to the farmer to produce more and better quality cane. The present price arrangement, based on weight alone, would do nothing to encourage the farmer to improve quality even if 3/ Project de Rapport sur l'Industrie Sucriere de la Republique d'Haiti, IDAI/OAS/ODM, Maurice Lucie-Smith, January 1976. 4/ National Sugar Company of Darbonne (Leogane).  4 - ARMEX A Page 4 the price were raised. It is essential, therefore, that a system be implemented based on the quality of cane by using a price formula to share the revenue earned from sugar and molasses. The establishment of such a cane payment system requires precise design to take into account the specific circumstances of Haiti and of each of its mill supply areas. The objectives of the system would be: (a) to produce cane with a high sucrose content; (b) to encourage the delivery of cane to the mill as early as possible after cutting to minimize the problem of stale cane; (c) to ensure a regular supply of cane to the mill; (d) to adjust the returans received by the farmer to take account of the needs of scheduled harvesting and changes in cane quality during .he crop; and (e) -to ensure that farmers and millers are adecuately compensated for groving the sugar in the field and extracting it in the factory. 12. One objection to such a system is that it would not work with a multiplicity of small farmers ill-informed about the operation of the system and distrustful of its mechanisms. The advantage of the existing US$13 per ton price is that it can remain (or be increased) as the floor price which the farmer receives and a premium would be paid on quality. This would have the effect of raising the price per ton to an equitable share of the sugar and molasses revenues. Thus, the farmer can only benefit from the system, and with proper information about measures to improve cane quality, he will improve his supply to the mill. Provided that small farmers will agree to joint testing of small loads of cane, the problem of the small size of individual farmer's supply can be resolved. 13. In all the cane areas within the sugar mills' influence, the supply of support services is deficient. The mills themselves have made certain efforts to provide cultivation services, inputs, credit, etc., but their financial capability to do so is limited. Cane cultivation services, to be provided on credit for repayment from cane deliveries, are needed -preferably under management coordinated with, but independent from, the mills. An increase in the supply of credit is essential. 14. Infrastructural problems are of rajor importance in all four of the mill supply areas. Although in some cases the problems require major investments, they can only be described in outline here: (a) protection of the catchment areas of all the rivers that cross the laine du Nord, the Plaine de Leogane, the Plaine des Cayes and the Plaine du Cul-de-Sac; (b) repair, clearing and maintenance of drainage systems in all these areas and the improvement of regional drainage, especially in the Plaine du Nord;  - 5 - ANNEA A Page 5 (c) improvement of irrigation, especially in Cul-de-Sac; and (d) improvement of roads and flood protection. These major items constitute regional development projects whose justification must be based on the whole range of other crops grown in the areas, not just sugarcane. Nonetheless, these infrastructural measures would have as much to contribute to improved yields of cane as would changes in agricultural practices and technology. 15. There has been virtually no adaptive research or extension in the sugar industry_ A responsible authority is necessary, either centralized under MARNDR or at the mills under a central coordinating body_ The first steps towards such a service have been taken in the Plaine du lord, with the provision of an expatriate agronomist under the auspices of the ODN. While such services should continue to receive international support, their basic finance and organization should come from within the sugar subsector of Haiti itself. A wide range of agronomic work remains to be done, including: (a) the introduction of new varieties, their quarantine, 'rial and multiplication for seed; (b) fertilizer trials in the four main cane areas; and (c) the development of cropping systems that discourage inter-cropping and allow the cultivation of cane at the proper ciensity, while at the same time guaranteeing the supply of essential food crcps, especially on small farms. 16. Shortage of cane transport is a serious problem at Citadelle and Dessalines but much less so at HASCO. Leogane has invested heavily in tractors and trailers to provide transport services to farmers. Such investment should be considered also for Citadelle and Dessalines. 17. One of the basic problems is the lack of any structure to the sugar industry. The mills are not associated in any form of producers' organization and they deal with the Government on an individual basis. There is no farmers' organization at the national or regional level to represent the views of cane growers, nor is there a consumers' organization. The major industrial users of white sugar--the soft drink bottlers--discuss their problems and requirements only on an ad-hoc basis with the Department of Commerce. 18. In these respects, Haiti is unusual among sugar producing countries, which normally have adaptive research organizations financed by the industry, as well as statutory organizations that control the industry, in which the Government, farmers, mills and consumers are represented. It is not enough to say that these organizations should be created, for unless they are the means of expressing a coordinated policy and strategy for the sugar subsector, they would simply be a redundant layer of bureaucracy. For this reason, the creation of a "Sugar Board" would be irrelevant unlpss it were  -6 - ~ AUJE A Page 6 part of a coordinated program for the rehabilitation and development of the sugar industry. 19. Xaiti could not and should not become a significant exporter of sugar; while a rational production policy is being determined, the country's access to the US market guarantees it a relatively high price and foreign exchange earnings-a function of its Generalized System of Preferences (asp) and Caribbean Basin Initiative (CBI) status. It has been suggested that Haiti may have lost its comparative advantage as a sugar producer, but Haiti is intrinsically a low-cost producer with low wage rates and low-cost, established process capacity. If Haiti has become a high-cost producer (assuming that the guaranteed price of US$0.24 per lb is considered the "cost of production'), it is because the policies toward the sugar subsector are inappropriate, tending to decrease utilization of capacity with consequent upward pressure on unit costs. 20. In establishing the guidelines for Government sugar policy, the influence of the international price should be circumscribed. Governments in all sugar-producing countries aim to guarantee a given production level either by regulation or direct intervention. International trade in sugar takes place primarily within bilateral and long-term agreements, e.g., ACP countries to the EEC under the Lome Convention, the US sugar cuota system, and Cuba to COMECON. The so-called 'world market' is a residual market, a dumping ground for surpluses not guaranteed stable prices under long-term agreements, which are themselves the result of governmental interventions that prevent a proper reaction between price and output. 21. Reference to 'world market' prices (e.g., the New York No. 11 contract or the London Daily Price) in the establishment of domestic sugar policy is of doubtful relevance since, even if a lon&-term average with any meaning could be computed from the long periods of low prices and short periods of very high prices, that average price would not represent long-run average co3ts of production. The "world price" is in effect tne final result of a wide range of policy measures in a large number of countries of which few, if any, make production responsive to that price. No sugar industry, however efficient, could survive by producing for the world market alone. The extreme fluctuations seen in this market are the price which has to be paid: (a) for receiving fixed or guaranteed prices in domestic markets and in much of international trade; and (b) for all-pervasive governmental involvement in domestic sugar industries and markets which impede a proper relationship among consumption, prices and production. In reality, the real world price of sugar would be a -eighted average of the No. 11 contract price and the long-term prices under which sugar is traded on bilateral agreements. 22. If Haiti does not adopt policies to improve the efficiency of its sugar industry, but instead imports from the world market on the assumption  -7- ANNEX A Page 7 that the import parity price will be less than the domestic price over the long term, it will import either (a) raw sugar, (b) white sugar, or (c) a combination of both. The -raw" sugar (sucre populaire) consumed in Haiti is a good quality sugar produced for local consumption. In theory, this could be brought from the Dominican Republic in bags in almost any quantity needed by Haiti. In practice, Haiti is importing white sugar almost exclusively, so that the alternative to domestic sugar production is effectively white sugar imports. 23- It has been historically impossible to make reasonably accurate long-term projections of the world sugar price. To the extent that struc'ural over-supply is built into the world sugar economy as a result of protection given to domestic sugar production by individual countries and economic groupings (specifically the EEC), the long-term average price will be below the long-run average cost of production_ Price projections on this basis are useless in the face of unpredictable influences (particularly climate) on production, which cause the huge price movements associated with the sugar cycle. Price projections are normally made of the New York No. tt contract price to which the other free world market prices (London, Paris, etc.) are closely related. This is the price for raw sugar of 960 pol, FOB+S Caribbean or Brazilian port. To arrive at a price for bagged white sugar CIF Port-au-Prince (the iaport parity price) the following should be taken into account: (a) the white sugar premium, which averages US560 per ton; (b) bagging costs; and (c) freight and insurance. The total effect of this is to increase the projected price of raw sugar by USVA.5-5.3 per lb. Recommendations 24. Since the problems of the sugar subsector are complex and widespread, the Government of Haiti should establish a high level Working Group to define objectives and policy for the sugar subsector. The Vorking Group should be composed of representatives of the Ministries of Commerce and Finance, ILARNDR and the mills, assisted in specific areas by specialists. 25. Critical information is lacking for a proper analysis of the sector by the Working Group, including agricultural costs o0