Agricultural policies have had an important impact on patterns of production. In general, they have tended to subsidize staple food production to keep prices low for urban consumers. In
the Dominican Republic, rice is the single most important source of daily calories, providing 25 percent more than any other crop. Per capita consumption in 2002 averaged 158 pounds, which is
more than two times the average in Latin America and the Caribbean, and more than six times the average in the U.S. In 2002, domestic consumption of rice amounted to 1.43 billion pounds.
A consequence of agricultural policies is that crops with positive environmental externalities on the protection of watersheds have been taxed, while farming practices with
negative environmental externalities have been encouraged Lizardo, 2003. For example, rice requires a liberal application of agrochemicals and extensive irrigation, but it is subsidized in the
form of trade barriers, domestic pricing and public provision of irrigation infrastructure. One report Lizardo, 2003 concludes that sustainable agricultural development requires a redefinition
of the prevailing pricing and subsidies schemes in order that producers and consumers internalize the positive and negative environmental externalities generated by different farming production
systems.
4.2 Mining
Falconbridge Dominicana, a Canadian-owned firm, operates a nickel-iron mine and smelter in Bonao. The Government has a 10-percent stake. The mine at Bonao has been in
operation since 1972. In the late 1980s, the Bonao nickel-iron mine was the second largest in the world.
The Government operated a mining operation in Cotuí for 20 years that produced doré an alloy of gold and silver for export. When it was purchased from a private U.S. company in
1979 it became the largest Dominican-owned company in the country. In the 1980’s, the Pueblo
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It is important to note that while the proportion of the rural population has declined, the total number of rural inhabitants has not decreased. In 1990 the total population and rural population were 7 and 2.9
20
Viejo mine, operated by Rosario Dominicano had an annual capacity of 1.7 million ounces of gold and silver. Financial, environmental and minerals processing problems forced the operation
to shut down in 1999. Rosario had fully exploited the oxide portion of the deposit. From 1975 to 1999, the mine had produced 5 million ounces of gold and 22 million ounces of silver. The
remaining sulfide material contains an estimated 16 million ounces of gold resources, making it one of the largest sulfide gold deposits in the world. The process of exploiting sulfide ores is
more expensive and requires different technology. In 2003, Canadian gold giant Placer Dome signed an agreement with the Government to
resume operations at the Pueblo Viejo mine. The company has pledged to invest US336 million to reactivate the old Rosario mine, in addition to the sum of US1.5 million per year to be spent
on water treatment. The Pueblo Viejo site presents an environmental challenge in the form of acid rock drainage from past operations. Under the agreement, the Government remains responsible
for all historic environmental liabilities while Placer Dome will assume responsibility for environmental effects resulting from its operations.
4.3 Tourism in Samana Bay
