By Pooja Bhatia

The earth­quake was only the lat­est dis­as­ter to cap­size the country’s already frag­ile local aid econ­omy. Now out­side orga­ni­za­tions are threat­en­ing to over­whelm it entirely.

On the sec­ond floor of a mod­est white house on a rut­ted road in Cap Hai­tien, 20 or so work­ers are busy at their work­sta­tions, churn­ing out upwards of 3 tons of peanut but­ter (mamba in Cre­ole) per month. But this is no ordi­nary peanut but­ter. It’s Medika Mamba, a thick paste used to com­bat child­hood mal­nu­tri­tion. It requires no cook­ing, refrig­er­a­tion, or rehy­dra­tion, and it can be admin­is­tered at home. It is home­made Hait­ian in a way that most prod­ucts are not these days: It uses local work­ers and peanuts from local farm­ers, and it reha­bil­i­tates Hait­ian chil­dren. In other words, it was the ideal thing to have around in the after­math of the Jan. 12 earthquake.

But aid agen­cies didn’t buy it. They had failed for 2½ years to audit the plant, a req­ui­site for pro­cure­ment, and so instead, they imported their own stuff: a sim­i­lar sup­ple­ment calledPlumpy’nut. The result? Even before the earth­quake, the mar­ket for so-called ready-to-use ther­a­peu­tic foods (RUTFs) was flooded — and Medika Mamba wasn’t able to com­pete. And while the needy chil­dren were still get­ting fed, it was a major blow to the mamba-producing Meds & Foods for Kids (MFK) fac­tory and its local employees.

Unfor­tu­nately, the Medika Mamba tale has been far too com­mon in Haiti for years, emblem­atic of what has been wrong with for­eign aid. Local pro­duc­ers can rarely com­pete with the influx of food, med­i­cine, and other sup­plies that aid agen­cies bring. This is part of the rea­son why today — after decades of aid depen­dence — Haiti has almost no local econ­omy for these goods.

When RUTFs were first cre­ated in 1999, they were seen as a major step up from old mal­nu­tri­tion reme­dies. In 2007, a con­sor­tium of major aid agen­cies, includ­ing the World Health Orga­ni­za­tion, UNICEF, and the World Food Pro­gram, declared it the gold-standard treat­ment for severe acute malnutrition.

Gold stan­dards can, how­ever, lead to gold rushes. Nutriset, the pri­vate French cor­po­ra­tion that makes Plumpy’nut, the world’s most pop­u­lar RUTF, saw its ship­ments rise almost three­fold from 2007 to 2008; last year, it sold $72.3 mil­lion worth, mostly to UNICEF.

The effi­ciency with which Nutriset was able to turn out Plumpy’nut, scal­ing up pro­duc­tion to meet demand, would have been unimag­in­able in Haiti. Most West­ern­ers can’t imag­ine the tan­gles, snarls, and vex­a­tions that char­ac­ter­ize any type of pro­duc­tion there. Farm­ing prac­tices are ancient, roads are awful, peo­ple lack edu­ca­tion, and elec­tric­ity and water are not free. The major­ity of peanut farm­ers are small­hold­ers; even if they had trac­tors, they wouldn’t have plots large enough to use them on. Farm­ers pre­pare the soil with pick­axes and hoes. So by the time MFK buys peanuts locally from farm­ers near Cap Hai­tien, they cost between $1 and $1.50 per kilo­gram — five times the U.S. price. And because farm­ers lack disease-resistant seeds and fungi­cides, such as those used in the United States, MFK has to throw out about 30 per­cent of the local peanuts it buys.

Given all this, it was no sur­prise that MFK strug­gled to com­pete when Nutriset estab­lished a Plumpy’nut fran­chise in the Domini­can Repub­lic, right next door to Haiti. But the next-door plant was not the real rea­son why MFK was shut out of the mar­ket. The trou­ble was the audit.

The saga started in 2007, the same year that the aid agen­cies declared RUTFs the best-available treat­ment for severe acute mal­nu­tri­tion. Later that year, the con­sor­tium estab­lished a food-safety audit process and charged Doc­tors With­out Bor­ders and UNICEF with inspect­ing man­u­fac­tur­ers who wanted to sup­ply the stuff. By then, MFK had been mak­ing Medika Mamba in Haiti for four years, and it asked UNICEF for an audit.

Accord­ing to MFK, UNICEF dithered and finally pawned the audit off to Doc­tors With­out Bor­ders at the end of 2008. In the mid­dle of the audit, Doc­tors With­out Bor­ders changed tack, cre­at­ing a new com­mit­tee for food-safety inspec­tions; shortly after, the organization’s audi­tor left his position. Unaudited, MFK could not bid on most RUTF con­tracts, but it con­tin­ued to sup­ply Medika Mamba to non-consortium agen­cies, includ­ing Catholic Relief Ser­vices and World Vision. Then late last year, MFK finally got a seal of approval from Sup­ply Chain Man­age­ment Sys­tem, a con­trac­tor for the U.S. Agency for Inter­na­tional Devel­op­ment, though Doc­tors With­out Bor­ders and UNICEF still didn’t rec­og­nize the audit.

UNICEF spokesper­son Edward Car­war­dine said in an inter­view that, while Medika Mamba met qual­ity require­ments, UNICEF prefers single-dose sachets to larger bags. Another UNICEF spokesper­son told me that the orga­ni­za­tion had found a sam­ple of Medika Mamba to be poor qual­ity because the oil sep­a­rates from the paste, like all organic peanut but­ter. But nei­ther a pack­ag­ing require­ment nor an emul­si­fi­ca­tion require­ment is out­lined in any pub­lished stan­dard. And in fact, some Plumpy’nut comes in mul­ti­dose serv­ings, which some nutri­tion­ists pre­fer because moth­ers are less likely to resell it in that form. MFK says UNICEF did not inform it of the emul­si­fi­ca­tion complaint.

A for­mer advi­sor in UNICEF’s sup­ply divi­sion, Stephen Jar­rett, said via email that UNICEF doesn’t inspect RUTF facil­i­ties from which it has no inten­tion of procur­ing. And after the earth­quake there was nearly enough Plumpy’nut to sat­isfy demand; pri­vate enti­ties like the Clin­ton Foun­da­tion donated more in the weeks that followed.

What­ever the ratio­nale for not audit­ing MFK, the result was clear — MFK became yet another Hait­ian pro­ducer unable to com­pete in the aid mar­ket. It’s a con­test that, to Hait­ian pro­duc­ers, often seems rigged: Aid agen­cies are accus­tomed to big global sup­pli­ers; imports are often cheaper (in some cases because they’re sub­si­dized or donated); and exporters encounter none of the headaches of pro­duc­tion that occur in Haiti daily.

In recent years, local pro­duc­tion has become a press­ing mat­ter. The issue ignited after the April 2008 food riots, when Pres­i­dent René Pré­val decried Haiti’s vul­ner­a­bil­ity to global com­mod­ity price swings; his reluc­tance to sub­si­dize the price of imported rice con­tributed to his government’s down­fall. After January’s earth­quake, politi­cians reit­er­ated the call for national pro­duc­tion, with Pré­val halt­ing food aid in the tent cities. Eighty per­cent of rice con­sumed in Haiti is imported, whether as aid or trade, and, accord­ing to the gov­ern­ment, the coun­try spends most of its for­eign exchange on food. That for­eign food pushes mar­ket prices down. As a result, the 50 per­cent of Haitians who sub­sist on agri­cul­ture are priced out of the mar­ket, con­demned to the pal­tri­est sub­sis­tence farm­ing imaginable.

If aid groups were to buy locally, it would be a good start. Of course, that’s not to say that it would be easy. The World Food Pro­gram had boosted its pur­chases of local rice and other food­stuffs before the earth­quake and con­tin­ues to do so. But Haiti’s inef­fi­cien­cies are never far from view: Hait­ian rice costs more than Pak­istani rice, for exam­ple, so the World Food Pro­gram must get spe­cial clear­ance to con­tract with a bid­der whose price is not the low­est. So far, it has been able to buy only 1 per­cent of its rice locally.

MFK’s way around this prob­lem has even­tu­ally come, at last. It will soon become a part of Nutriset, which will in turn shut down its Domini­can fac­tory. MFK founder and direc­tor Patri­cia Wolff says one of the major advan­tages of join­ing Nutriset is the cred­i­bil­ity it gives MFK with UNICEF, the biggest poten­tial buyer. The MFK facil­ity will prob­a­bly be audited at last and will be thus able to com­pete for the kind of large con­tracts that would make it sus­tain­able. “Our idea was to build a model that was replic­a­ble,” Wolff told me. “But human­i­tar­ian inter­na­tional buy­ers have never bought from the national pro­duc­ers. So maybe, the les­son is, it’s not sustainable.”

http://www.foreignpolicy.com/articles/2010/06/30/a_tremor_for_haitis_aid_industry