Cuba's agricultural decline sparks major reform

HAVANA Thu Apr 3, 2008 12:26pm EDT

People shop at a farmer's market in Havana March 17, 2008. REUTERS/Claudia Daut

People shop at a farmer's market in Havana March 17, 2008.

Credit: Reuters/Claudia Daut

HAVANA (Reuters) - Communist Cuba's soaring food imports and a decline in its cash crops of sugar, tobacco, coffee and citrus have led new President Raul Castro to launch what is developing into a sweeping reform of agriculture.

Decision-making, from land use to resource allocation, has moved from the national to local level, stores are opening where farmers can buy some supplies for the first time in decades and increasingly they can sell their produce directly to local consumers and state institutions like schools and hospitals.

For years, the country has leased plots of land to individuals interested in coffee and tobacco farming with poor results.

Now, at the same time that restrictions on the sale of computers, cell phones and hotel rooms are lifted, more land is being granted to the proven 250,000 existing private farmers and 1,100 cooperatives that produce more than half the country's food on 20 percent of the tilled land.

The reforms, rolled out since late February when Raul Castro succeeded his ailing brother Fidel Castro to become Cuba's first new leader in 50 years, are coming none too soon, local experts said.

Coffee output is down more than 50 percent compared with 2001 and tobacco is expected to decline a bit after stagnating at around 40,000 metric tons for years.

Sugar output has come in at just over a million metric tons a year since 2004, compared with 8 million in 1991, and last year citrus output registered half of the nearly million metric tons of 2001.

The country now imports around 80 percent of its basic food stuffs such as rice, powdered milk, beans and wheat rationed to the population.

"We have been calling for these changes for many years and expect more will be needed in the future," a local economist said, asking his name not be used.

More than 1,000 cooperatives working state lands since huge farms were broken down in the early 1990s are benefiting from the changes as well, including the doubling and even tripling of state prices for their goods.

INEFFICIENT

Around 50 percent of the state cooperatives operate at a loss and while they cover far more land than the private sector, they produce far less.

Cuba's deputy agriculture minister, Alcides Lopez, announced last month that state cooperatives would be given more credit and resources and more latitude in deciding what to produce and where to sell their output.

"It is the opportunity we have been waiting for, local and more direct attention from the authorities and resources so we can work," farmer Diogenes Fernandez said in a telephone interview from the eastern province of Santiago de Cuba.

"Up to now our hands have been tied, there was nothing to work with, little motivation. Now everything is changing," Fernandez, a member of a state cooperative, said.

Meanwhile, both private and public sugar cooperatives were told last month that if they can reach yields of 70 metric tons per 2.5 acres (one hectare) or more, they can produce whatever they want on extra land they now have or are granted in the future, official media reported.

"Conceptually, decentralizing decision-making and resource allocation from the national to local level is a step in the right direction," international agriculture and sugar industry analyst G.B. Hagelberg said.

"Combined with decentralization, if the restructuring in fact increases material support for the non-state farm sector, output and efficiency are likely to rise," he said.

But Hagelberg, a long-time critic of Cuba's state-dominated agriculture, cautioned that only time would tell if real competition and markets would develop and the reforms amount to more than "rearranging the deck chairs on the Titanic."

(Editing by Tom Brown and Kieran Murray)

(For special coverage from Reuters on the changes in Cuba, see: here)