Focus on Cuba

by Chris Lyddon
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Cuba depends on grain imports to keep its population fed. It faced a profound economic crisis in the 1990s after the ending of large-scale support from the former Soviet Union. Government action to ease the state monopoly on food are, so far, having little effect on the grain sector.

In its Grain Market Report, the International Grains Council (IGC) puts Cuba’s total grains imports at 1.4 million tonnes in 2012-13, down from 1.5 million the year before. Wheat imports are put at an unchanged 800,000 tonnes.

The IGC puts Cuban rice production in 2012-13 at 300,000 tonnes, down from 400,000 the year before, while imports are put at 500,000 tonnes, up from 400,000.

In practical terms, Cuba does not produce wheat, although there have been attempts to introduce the crop. According to a report cited by the Cuba Headlines website, the central Cuban province of Cienfuegos produced a modest harvest in 2012.

“Grain expert Mario Scrubb told Prensa Latina news agency that the Cienfuegos farmers harvested two tonnes of seeds that will be used to sow some 70 hectares next November and December,” it said in a report published in September 2012.

“They’re making some changes in the overall system of agriculture but this really does not have, or has not had yet, any real impact on wheat,” Mitch Skalicky, U.S. Wheat Associates, Regional Vice-President based in Mexico, told World Grain. “It is more related to agricultural production and marketing for fruits and vegetables, those types of things, in which they are turning it over to the farmers and so forth.

“We have been travelling to Cuba as an organization since 1998. That was the first trip. I’ve traveled back there on multiple occasions since then.”

However, Cuba is not buying wheat from the U.S.

“Because of the trade aspects related to problems with trade policy between the U.S. and Cuba, the Cubans have given us a pretty candid opinion of what the situation is. The last time I was in Cuba was January of 2010. They essentially told us that unless there were some major changes in U.S. trade policy, they did not intend to buy U.S. wheat. If you look at the numbers, that’s essentially what they have done. There hasn’t been a whole lot of wheat trade in that timeframe, the last two to three years.”

Flour milling

Cuba is reported to have expanded its flour producing industry, using imported wheat. The Cuban news agency CAN has reported that a national strategy to replace imports means that the Cuban flour industry can now meet domestic demand of around 150,000 tonnes,

According to the agency, the industry produced 100,000 tonnes of flour in 2010, a figure which increased to 139,000 in 2011. It said that the flour industry will produce 500,000 tonnes a year by 2015.

“In order to achieve the production increase, the industry will replace old milling equipment in its facilities,” it said. “The sector is also expected to strengthen its economic performance, improve its corporative image and achieve the full certification of its quality system.”

In an earlier report, the agency put the total number of mills needed to keep the country’s demand satisfied at 10. It was announcing the planned building of the 10th.

When Skalicky reported on the sector in 2010, there were five flour mills owned and operated by the Cuban Ministry of Food and one mill in Havana, IMSA (Industrial Molinera de la Habana S.A.), run by a joint venture operation involving the Cuban government and a Mexican company. IMSA was formed by the Mexican company which has controlling interest in the mill, and together with a Cuban holding company, Coralsa, which is part of the Cuban Ministry of Food (MINAL), the two created the IMSA flour mill in Havana. All the mills were in port locations.

In a recent report on the food sector in Cuba, the Reuters news agency described how private food distribution networks from the farm through to retail outlets are emerging as the authorities “gradually dismantle the state’s monopoly on the purchase and sale of agricultural products.”

“The country’s first wholesale produce market is up and running on the outskirts of Havana, and across the island farmers report they are selling more of their goods directly to customers, ranging from hotels to individual vendors,” the report said. “Those involved say the change is speeding the flow of food to market, helping end longstanding inefficiencies that often left crops to rot in fields and putting more money in the pockets of producers.”

“We purchased two old trucks this year, in part to deliver produce to our state clients in Camaguey,” Reuters quoted the president of a cooperative near the city. “A few years ago we had to sell everything to the state, which then sold it to our clients a few days later. Now it arrives fresh and we keep the 21% profit that went to the state wholesaler.”

Farm output, according to Reuters, is up by just a few percentage points since President Raul Castro replaced his brother Fidel in 2008 and began agricultural reforms. “Local farmers and experts say resistant bureaucrats, cautious leadership, the state’s continued monopoly on farm inputs and a lack of financing are holding up growth,” the agency said. “Yet, deregulation is gradually taking hold and private supply chains, whose participants were once labeled ‘parasitic middlemen’ and even criminals by authorities, are emerging, now with the state’s blessing.”

Five years ago, 85% of all food produced in the country was contracted and sold by the state, the report said.

By last year it had fallen to below 60%, according to the government. Within a few years it is expected to bottom out at around 35%, mainly root vegetables, grains and export crops.

In a separate report, Reuters said that Cuba planted biotech crops for the first time in 2012 as farmers there seeded 3,000 hectares of hybrid biotech maize.

An article on the Globalpost website described the rationing system operated by the Cuban authorities.

“State-subsidized bread is regarded as a natural right in socialist Cuba,” it said. “Neighborhood bakeries across the island churn it out in blanched, spongy loaves and two-foot torpedoes so rigid they could practically whack a baseball.

“Every Cuban is entitled to at least one bun-sized piece per day as part of the island’s ration system, and bread is such a staple of the Cuban diet that long lines form outside government outlets for those wanting to buy more. But with tens of thousands of new Cuban entrepreneurs opening up private snack bars, cafeterias and pizza stands as part of President Raul Castro’s economic reforms, the island’s state-run bakeries have been coming up short lately. Suspicions have fallen on the new small businesses, which may be buying up more and more flour on the black market.”

The shortage at the state shops points to an emerging problem with the Castro government’s plan to shed hundreds of thousands of government employees and create a new class of private entrepreneurs, it said.

“In the absence of a formal wholesale market to supply the upstart businesses, pilfering employees with access to state supplies and stockrooms become the island’s de facto wholesalers,” it said.

Economic decline good for health?

A study published recently in the British Medical Journal (BMJ) looked at the effect of Cuba’s 1990s economic crisis on health.

“Marked and rapid reductions in mortality from diabetes and coronary heart disease were observed in Cuba after the profound economic crisis of the early 1990s,” researchers from the University of Alcalá in Spain said. “These trends were associated with the declining capacity of the Cuban economy to assure food and mass transportation in the aftermath of the dissolution of the former Soviet Union and the tightening of the U.S. embargo. Severe shortages of food and gas resulted in a widespread decline in dietary energy intake and increase in energy expenditure (mainly through walking and cycling as alternatives to mechanized transportation).”

“The largest effect of this economic crisis occurred over a period of about five years (1991-95, the so called “special period”), resulting in an average weight loss of 4 to 5 kg across the adult population,” they said. “Since then, the Cuban economy has shown a modest but constant recovery, especially after the year 2000. In fact, surveys have shown that the prevalence of obesity has now exceeded pre-crisis levels.”

From a low in the mid-1990s, average daily intake increased to pre-crisis levels in 2002 to level off in 2005. Physical activity had a slight downward trend from the mid-1990s, becoming stable from 2001. The result was large changes in body weight.

There were other effects. “Problems with food production in Cuba led to the creation and expansion of urban agriculture, allowing citizens to buy fresh produce directly from farmers,” the researchers said. “Large public health campaigns in schools and communities are currently in place using community gardening as an effort to improve nutrition education and diet quality.”

“We found that a population-wide loss of 4-5 kg in weight in a relatively healthy population was accompanied by diabetes mortality falling by half and mortality from coronary heart disease falling by a third,” it said. “These data are a notable illustration of the potential health benefits of reversing the global obesity epidemic.”

Key Facts

Capital: Havana

Population: 11,061,886 (July 2013 est.)

Religion: Nominally Roman Catholic 85%, Protestant, Jehovah’s Witnesses, Jewish, Santeria; note: prior to Castro assuming power.

Location: Caribbean, island between the Caribbean Sea and the North Atlantic Ocean, 150 kilometers south of Key West, Florida, U.S.

Government: Communist state. Chief of state and head of government: General Raul Castro (since Feb. 24, 2008).

Economy: The government continues to balance the need for loosening its socialist economic system against a desire for firm political control. The government in April 2011 held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. President Raul Castro said such changes were needed to update the economic model to ensure the survival of socialism. The government has expanded opportunities for self-employment and has introduced limited reforms, some initially implemented in the 1990s, to increase enterprise efficiency and alleviate serious shortages of food, consumer goods, services and housing. The average Cuban’s standard of living remains at a lower level than before the downturn of the 1990s, which was caused by the loss of Soviet aid and domestic inefficiencies. Since late 2000, Venezuela has been providing oil on preferential terms, and it currently supplies over 100,000 barrels per day of petroleum products. Cuba has been paying for the oil, in part, with the services of Cuban personnel in Venezuela including some 30,000 medical professionals.

GDP per capita: $10,200 (2010 est.); inflation: 5.5% (2012 est.); unemployment: 3.8% (2012 est.).

Currency: Cuban pesos (CUP): 1 U.S. dollar equals 1 Cuban peso (April 23, 2013).

Exports: $5.6 billion (2012 est.): petroleum, nickel, medical products, sugar, tobacco, fish, citrus, coffee.

Imports: $13.68 billion (2012 est.): petroleum, food, machinery and equipment, chemicals.

Major crops/agricultural products: Sugar, tobacco, citrus, coffee, rice, potatoes, beans; livestock.

Agriculture: 3.8% of GDP and 19.7% of the labor force.

Internet: Code: .cu; 3,244 (2012) hosts and 1.606 million users.


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