Country Focus: Cuba

by Stormy Wylie
Share This:

From the 1959 Cuban revolution until the dissolution of its key benefactor, the Soviet Union, Cuban economic development featured rapid socialization, modernization and external dependency on Eastern European trading partners.

Petroleum, industrial equipment, supplies, agricultural inputs and foodstuffs were imported, with the Soviet Union also providing credit and other economic subsidies. Some estimates are that as much as 57% of the Cuban population's total caloric consumption came from foreign suppliers during this period.

Through laws enacted in 1959 and 1963, the state took control of more than 80% of the country's arable land, and the state subsequently made large investments in irrigation, soil improvement, the road and highway network and other infrastructure. Agricultural production focused on a system of large-scale, capital-intensive state farms whose efficiency was uneven.

Also, numerous small private farmers continued to operate. To improve overall productivity, the Cuban government in the 1980s authorized these small farmers to form Agricultural-Livestock Production Cooperatives, or CPAs.

The cooperative arrangements enabled small private farmers to pool their land and resources and attain greater returns. Although the government continued to determine the crops produced, the CPAs owned their entire means of production, including the land, buildings and equipment.

With Cuba's heavy dependence on the Soviet Union, the Soviet collapse threw Cuba's economy into turmoil. Between 1989 and 1993, Cuba suffered a 35% decline in gross domestic product before G.D.P. stabilized. In 1994, Cuba reported 0.7% growth, followed by increases of 2.5% in 1995 and 7.8% in 1996. Growth in 1997 and 1998 was 2.5% and 1.2%, respectively.

During this period of economic crisis, imported food and other goods either were rationed or disappeared completely, and domestic agriculture, with its reliance on imported inputs, was unable to make up the shortfall. As one observer noted, Cuba's industrialized agricultural system suddenly was faced with the challenge of "doubling food production while more than halving inputs — and at the same time maintaining export crop production" to prevent erosion of critical foreign exchange.

In response to the loss of imported inputs, Cuba has converted its agricultural system over the past decade. Agricultural policy and supply controls fall under the authority of several government agencies.

Because sugarcane is the country's largest crop and most significant export, the Ministry of the Sugar Industry directs all production and processing activities. The Ministry of Agriculture controls production and supply for other agricultural activities and products, including vegetables, fruits, coffee, animal husbandry and forestry, while the Ministry of Food Supply owns and operates the country's flour mills.

Cuba's agronomists and other agricultural scientists, with the encouragement of environmental groups around the world, have worked to adopt a sustainable farm management program that has helped the country meet many of its domestic food needs.

Cuba generally enjoys favorable climatic conditions for agriculture, including two well-defined periods of dry and rainy seasons, good availability of fresh water and rich soil. About 24% of the island's total area of 110,860 square km is arable land, with 7% in permanent crops and 27% in permanent pasture.

Cuba's farm sector today relies on practices that include composting, reduced tillage, organic soil amendments, biofertilizers, biological pest control and crop rotation. Intensive use of human and animal labor has replaced the mechanized equipment that required imported petroleum.

This transformation was accompanied by a number of policy changes and modest reforms to improve efficiency and provide incentives. These moves included converting large and inefficient state farms into smaller scale farm management groups.

The relative success of the CPA cooperatives prompted the government to form another type of cooperative, the Basic Unit of Cooperative Production. These cooperatives, unlike the land-owning CPAs, lease land from the state. But the new cooperatives own their own buildings and equipment as well as their agricultural output.

The changed emphasis on cooperatives in the 1990s has reduced the state's share of agricultural land farmed to less than 30%, with cooperatives and private farms accounting for the remainder.

Another critical reform was adopted in October 1994 with the introduction of liberalized agricultural markets. Under the new system, state, cooperative and private farmers may sell at unrestricted market prices all agricultural output that exceeds government quotas. The existence of these markets has provided production incentives and broadened legal distribution outlets, limiting the development and scope of black markets in many agricultural products.

But the changes have not ended all of Cuba's agricultural and food supply problems. Some popular food products, such as bread, remain under rationing. Sugar production has not recovered to pre-1990s levels, with a resulting loss in exports and foreign exchange earnings.

Cuba's sugar production through the 1980s averaged about 8 million tonnes a year, with exports at a similar level. But since 1993, average annual sugar output has reached only 3.5 million tonnes, with exports at about 3.1 million a year. The inability to sustain sugar production and exports is one reason the country began in the 1990s to develop its tourist industry, which now is the most important contributor to foreign exchange.

MILLING INDUSTRY. Cuba's economic problems also have cut into its ability to import wheat. Bread is a traditional food, and since the country grows no wheat, it relies on imports.

Through the 1980s, Cuba imported about 1.4 million tonnes of wheat a year, and total supply availability on a per capita basis was about 80 kg a year, according to the Food and Agriculture Organization of the United Nations. In the 1990s, imports have dropped below 1 million tonnes per year, reaching a low of 797,000 tonnes in 1995, while per capita supplies fell to about 62 kg as of 1997.

Most of Cuba's wheat imports in recent years have been provided by France, with the help of COFACE credit. France recently renewed credit under a food-for-sugar barter program for wheat and flour exports worth U.S.$180 million.

The aftermath of the economic crisis brought not only a reduction in the total amount of wheat consumed, but also the mix of food and feed use. Prior to 1989, as much as 45% of wheat imported was used for feed, but by the late 1990s, feed use had dropped to a little as 9%.

Cubans eat a substantial amount of bread, and many prefer bread with all three meals during the day when available. The primary type of bread is called Cuban bread and is similar in appearance, size and texture to French bread.

Cuban meals are served with the loaf bread to dip into foods with sauces and gravies. It is also a primary breakfast food, often served with butter and milk.

The shortage of cash to pay for wheat imports has caused bread rationing. According to a report from the U.S. Wheat Associates, analysts indicate that if Cuba imported an additional 500,000 tonnes of wheat, bread rationing would end.

As of 1996, reports indicated the Ministry of Food Industry operated eight flour mills, incorporating 15 milling sections. Of those, two began service in 1992 and 1993, and four more were reported to be in good condition. The remaining units were as much as 40 years old and in fair or poor condition .

Recent reports indicate that the Ministry currently is milling flour at five locations throughout the country. Of the two mills located in Havana, one is a new Buhler 180-tonne per day facility inaugurated in 1998.

The other mills are located in Cienfuegos, Santiago and Holguin in eastern Cuba. All but the Holguin mill are located in port cities, with the Holguin operation receiving wheat through the port of Antilla.

According to the International Grains Council, Cuba's flour output in 1997 was an estimated 350,000 tonnes of flour, compared with 400,000 in 1990. Production in the 1980s was estimated to exceed 400,000 tonnes.

In recent decades, Cuba has relied on imported flour to supplement its domestic production to meet domestic demand. But the economic situation has curbed Cuba's financial ability to import flour.

From a peak of 546,000 tonnes of flour, grain equivalent, in 1983-84, Cuba's flour imports have dropped precipitously. Imports were estimated at 445,000 tonnes in 1989-90, at about 204,000 tonnes per year in the early 1990s and somewhere around 160,000 tonnes currently.

TRADE. After the collapse of the Soviet bloc, Cuba had to develop new trading partners. Europe, Canada and several South American countries have stepped in to provide the bulk of agrifood imports, while Europe, Canada and Russia provide export markets for Cuban sugar and tobacco products.

In 1997, Cuba's agrifood imports totaled U.S.$692 million, according to statistics from Agriculture and Agrifood Canada. Of that total, U.S.$137 million, the largest single category, was for non-durum wheat from France. Imports of beans, peas and other legumes from Chile totaled U.S.$70 million, the next largest category.

Cuba's trade situation since the demise of the Soviet Union has been made more difficult by the nearly 40-year-old embargo placed on the country by its nearest neighbor, the United States, as well as even tighter sanctions passed by U.S. legislators in the mid-1990s. Cuban officials in the past few months have publicly aired their grievances with the United States over trade sanctions during proceedings in the Cuban Supreme Court, where officials filed a claim against the U.S. for economic damages.

According to a March 6 report in Granma International, an official Cuban news outlet, U.S. sanctions add U.S.$57 million a year in costs to import foodstuffs including powdered milk, wheat, poultry and soy products. In the case of wheat, officials from ALIMPORT, the foodstuffs import agency, said maritime freight charges alone represented U.S.$10 million to $11 million a year in additional costs, based on U.S. laws that prohibit vessels unloading at Cuban ports to subsequently take on cargo in the United States.

Although many in the U.S. business sector, particularly those with agricultural interests, recently have been advocating an end to the trade bans, political animosities between the two countries continue to run high, leaving a resolution to the issue in doubt.

DATA

(1,000 tonnes)

Production

Consumption

Exports

Imports

Sugar

3,500

710

2,500

0

Wheat

0

950

0

950

Coarse grains

70

120

0

50

Rice

130

530

0

400

1999-00 marketing year estimates for grains, 2000-01 for sugar

Source: U.S. Department of Agriculture

 

___3080___

Partners