A tour of the seeds*

By Elsa Claro

HAVANA – Is it true that between 2013 and 2014 the dual currency in Cuba will be eliminated? This is a correction of the publication where the prediction was made and of the bold optimism on the part of the economist who wrote it.

That eventuality does not seem very near, even though authorities are working on strengthening the peso in order to abandon the convertible currency (CUC) and its rate of exchange, which has a strong bearing on production, costs and consumption.

Experienced agronomists are saying that the high prices of agricultural products to the ordinary consumer persist, to a degree, because of the two currencies that coexist on the island.

The rise (some of it excessive) in the cost of products at stores that sell in CUC causes some to seek compensation, raising the price of other goods, including indispensable stuff such as food.

Everything that originates in the countryside picks up surcharges according to the number of hands that it goes through. The longer the commercialization chain, the higher the cost to the ordinary buyer.

In general, both producers and intermediaries try to reach the standards established for the sales in CUC. So long as different prices exist for sales in convertible currency and people with the money to buy exist, the high cost of agricultural products will not be satisfactorily resolved. This opinion comes from one of the experts I consulted; other colleagues of his agree.

Collaterally, one of several reasons why farmers prefer to sell to different intermediaries is that [the state-run agency] Acopio, which is also an intermediary, reduces the quality of the merchandise with delays and unnecessary red tape.

It would be best to link the wages of Acopio workers to the results of their labors. Right now, their inefficiency provokes considerable losses and great irritation; also, it goes counter to the government’s effort to achieve alimentary sufficiency.

Meanwhile, farmers who are financially affected by the loss of part of their harvests will find ways to recover through the prices they set for their products.

Here’s another opinion from the experts: Farmers could sell at lower prices if they could buy their supplies in Cuban pesos. However, the supplies sold in Cuban pesos are not enough, and farmers have to buy fuel, clothing and tools in CUC.

In addition, there is the usurious mentality of intermediaries and vendors, who set high prices – agreed upon among themselves – that are way above the prices they paid the producer on the field.

Too, bear in mind that the costs of production also are high. One of the concurrent factors is the greater use of salaried manual labor. As his trade expands, a self-employed farmer hires more workers, some of them to guard the harvests or the cattle.

In the final result (which means a rise in production or prices) there are circumstances such as the insufficient quantity of fertilizers and tools for the control of plagues or diseases. That affects production. The lack of quality seeds also leads to serious problems.

Between 1963 and 1990, the technology of seed production improved continuously, so the country could be assured of as much as it needed. There were improvements in the conditions of production, harvests, output and storage, and legal bases were set up to ensure the application of suitable technologies.

That is why the importation of seeds was limited to only a few hybrids and varieties that, because of their exceptional behavior in our natural conditions, justified the investment.
The introduction of biotechnology in these processes was an important step forward. It enabled the government to export seeds and vitro plants of some crops. But this capability began to deteriorate in the 1990s, basically because of a lack of resources to maintain the infrastructure.

The Seeds Company disappeared, the Service of Inspection and Certification lost its capacity to oversee production, and the issue of seeds became critical. Urban agriculture and the informal production of seeds are a palliative for the needs, while efforts are made to restore that decisive portion of agriculture.

The government’s efforts to improve the situation include supplying irrigation equipment and the so-called technological packages for the “protected areas,” which are given everything they need. However, some farmers reroute some of the supplies to other crops.
It also happens that the supplies sometimes arrive too late, thus preventing the farmer from achieving the expected results.

As the reader can appreciate, there are many components that cause an inconsistent growth in the production of food and don’t guarantee the demand.

Agriculture is a high-risk economic activity with low profits. It requires a long cycle to recoup the investments. That is why it is not attractive for investment capital.
If the need to gain profits in short term, no matter what the cost, is added to the individual problems, the economic situation and the blunders, you’ll find an explanation for the insufficient production and skyrocketing prices.

Some economists believe that a solid and sustained leap in the agro trade would determine the momentum and spark movement in the national economy. Something is being done to achieve that. Since 2007, actions have been implemented to reactivate that decisive sector.

The official measures are meant to achieve savings, by producing what has been imported from a market controlled by transnational corporations, which hike the prices in an alarming fashion. Those measures would produce an increase in agro business capable of satisfying the main domestic needs, plus a surplus that could be used for the exportation of goods.

To that end, the government is paying more for the milk it buys from farmers, as well as the beef and various agricultural products it buys from farmers. It has decentralized (simplified structures and ministerial functions) everything about the agro business so that the municipalities (which are closest to the farmers) can make decisions or solve problems affecting that business.

The government increased the leasing of land in usufruct, the extent of land a farmer may have, and his chances to bequeath it as inheritance. It also expanded the construction of homes and other buildings used for agro work, which generate primary production and food processing.

Agricultural microcredits were also expanded, but some experts believe that the government should create an agricultural bank that, because of its specialty and weight, will help develop the weak spaces in that economic sector.

At the same time, the experts believe it’s necessary to fund the restoration of laboratories and slaughterhouses that were lost or damaged by the crisis in Cuba in the 1990s.

There are people who are well prepared to confront the present challenges. The official will is expressed in what has been done to energize the productive forces in this important sector. But it is necessary to continue to oil cogs and wheels, eliminate some, change others, if we want a happy ending to this story that does not end here or now.

(*) In preparation for this article, I consulted several agronomists and academicians whose collaboration I wish to acknowledge.