Agriculture: ‘Necessary transformations’
By Manuel Alberto Ramy Read Spanish Version
The agro sector — vegetable, dairy and cattle farming — means foodstuffs, a business on which Cuba spent $1.7 billion in 2007. Increasing production and productivity in this sector is a vital problem for the country and the Cubans, so it has a dual dimension: to satisfy the needs of the population at acceptable prices and to achieve 
alimentary sovereignty as soon as possible, reducing dependence on the international market to a minimum, now that prices (according to experts) will continue to rise.
The topic is not simple and it’s urgent. To learn more about it, I contacted Armando Nova, academician, professor and member of the Cuban Center for Economic Studies (CEEC) at the University of Havana. Chatting with this specialist is a real pleasure and listening to him means understanding the problems and possible solutions that affect the agro economy.
We meet in a hall at the CEEC and he begins by telling me that the sector "has a strategic importance, because it has a multiplying effect. In other words, it generates raw materials, raw foods, exportable goods and is a significant source of employment that provides jobs for about 24 percent of the nation’s work force."
From Havana
Agriculture: ‘Necessary transformations’
By Manuel Alberto Ramy
maprogre@gmail.com
The agro sector — vegetable, dairy and cattle farming — means foodstuffs, a business on which Cuba spent $1.7 billion in 2007. Increasing production and productivity in this sector is a vital problem for the country and the Cubans, so it has a dual dimension: to satisfy the needs of the population at acceptable prices and to achieve alimentary sovereignty as soon as possible, reducing dependence on the international market to a minimum, now that prices (according to experts) will continue to rise.
The topic is not simple and it’s urgent. To learn more about it, I contacted Armando Nova, academician, professor and member of the Cuban Center for Economic Studies (CEEC) at the University of Havana. Chatting with this specialist is a real pleasure and listening to him means understanding the problems and possible solutions that affect the agro economy.
We meet in a hall at the CEEC and he begins by telling me that the sector "has a strategic importance, because it has a multiplying effect. In other words, it generates raw materials, raw foods, exportable goods and is a significant source of employment that provides jobs for about 24 percent of the nation’s work force."
I comment that the biggest daily concerns of the people are food and prices. Nova agrees and adds: "The agro sector has been called upon to find solutions; a series of necessary transformations are required in that sector."
Producers and problems
Cuba has production organizations such as the Basic Units of Cooperative Production (UBPC), where the farmers own the means of production but not the land. Private producers join the National Association of Small Farmers (ANAP), the Cooperatives for Credit and Services (CCS), a union of landowners who share resources and revenue, and the Cooperatives for Agro Production (CPA), gatherings of farmers who benefited from the first and second laws of agrarian reform, which gave them land ownership. Later on, by joining the cooperatives, they ceded that ownership.
I talk about land ownership and its different characteristics, trying to find out to what degree it is an important factor in productive efficacy. Nova agrees that different forms of ownership can exist but points out that the essential problem lies in the "exercise of ownership," the use of property.
"The nonrealization of property affects everyone (CPA, UBPC, etc.) in various degrees," he says. And he provides a humorous example: "You own your shirt, but you can wear it only on Saturdays, not Sundays, and you can wash it only on the day I select, and I provide the detergent." At the end, you come to the conclusion that you do not own your shirt.
Didactic caricature aside, the topic’s history goes back to the great crisis of the 1990s, when "structural changes [occurred], when the overall state-owned businesses were transformed into cooperatives, the so-called UBPCs, that turned the farmers into cooperativists, into owners, except for the land, which is patrimony of the State. They became owners of the rest of the means of production and the products themselves. That’s where the process began, at least that was the point of departure."
According to Nova, this change from farm worker to cooperativist and owner of the means of production "should have gone through a process of transformation, where each UBPC should have reached an important level of autonomy in terms of decision-making, in terms of the possibility to acquire its own needs, to discuss profitable prices for its agricultural products […] so as stimulate the producers. That did not happen." In that way, my interlocutor put a metaphorical shirt on reality.
The restrictions imposed by the central organizations — the Ministries of Agriculture and Sugar Industry — limited the use of property, which covers the entire cycle of production, distribution, exchange and consumption. "In that cycle, production is a very important element. So is consumption, but you can’t consume what you cannot produce," Nova said.
All producers, regardless of how they’re organized, face the same limitations in various degrees, he explained. All? Yes, he answered. The CPAs, too?
The CPAs "lose the individual right to property because they are suppliers. They sell and the customers pay. In other words, they have a greater degree of autonomy, but not much, because they also have levels of commitment to the State, or to Acopio [the state-run distributor]. The prices are fixed; they cannot resort to other markets.
"The situation is very similar [to the UBPCs], although not as dependent, because they have a greater degree of autonomy. But the environment works against achieving a realization of property." The final outcome is that "there is a reserve of unexploited productivity, because the producer is not totally stimulated," due to a series of restrictions that prevent the sector’s productive development.
Possible solutions
If the objective is to increase production and productivity, the most important need is to encourage the producers. How? According to professor Nova, the incentives begin with an effective management of the different forms of exploitable property, freeing them from all constraints. The producers should be allowed to take part in the entire cycle, including the commercialization of the products.
This point is important, because there is a state-run organization called Acopio that, in addition to setting up all kinds of commitments and contracts with the producers, including prices, "commercializes between 70 percent and 80 percent of the production." Some estimates show that Acopio earns profits between 27 percent and 30 percent — a high return, Nova says — at a time when the major beneficiary should be the producer, not the distributor.
Nova believes that there should be a profit margin for other distributors or representatives of the various producers, so they can compete with the current monopoly, which — often and for various reasons — does not harvest the crops in time, generating losses.
As to the role of supply and demand, the role of the market, the specialist opines that the state should always be "a facilitator in this entire process, and an observer who can act at any time to keep the market [system] from getting out of hand."
To obtain supplies of every kind is vital. "The producer must be able to go someplace and, on the basis of his production, buy the supplies he needs to close the productive cycle," Nova says. I point out that, according to reliable sources, a supply store is already open for business in the province of Camagüey.
I left for the end the increase of payments to the producers, something that is being applied to different products. Potatoes — whose production declined in 2006-2007 due to various factors, including the weather — used to sell for 12 national pesos a quintal (100 kilos). Now, potatoes sell for between 25 and 26 pesos, depending on the quality. This same policy, with the incentive of payment in convertible pesos for part of the harvest, is being applied to tobacco producers, with excellent results.
Milk producers have seen an increase in the price of their product to 2.40 pesos per liter, plus an addition of 2 cents (in convertible currency) paid out per liter. Unquestionably, this motivation is producing results. But, has the production of milk increased, or is the milk that used to be sold in the black market now sold in the open market?
That will be the topic of my next article.
Manuel Alberto Ramy is Havana bureau chief of Radio Progreso Alternativa and editor of Progreso Semanal, the Spanish-language version of Progreso Weekly.
