Cuban agriculture: Decentralization urgently needed

HAVANA – Food production from Cuba’s agricultural sector constitutes a highly strategic aspect of the Cuban economy. On the one hand, as a supplier of fresh food for the immediate use of the population, and on the other, as a generator of food for animal production, later destined for the consumption by the population. This sector is a significant supplier of raw materials for the food processing industry, which at the same time is destined for consumption by Cubans.

Cuban agriculture possesses a remarkable production potential that is not fully utilized, while registering a low economic-productivity efficiency. Undoubtedly, this sector can and should contribute significantly to the significant reduction of the current dependency on food exports to which the Cuban economy is subject to, and which increases its vulnerability.

From 2008 to date, more than twenty transformations have been implemented in the Cuban agricultural sector, the most important being the delivery of idle land in usufruct to private producers which led to significant structural changes.

Meanwhile, there is no significant increase in the agricultural-livestock production, rather a decreasing annual average rate (see tables 1 and 2). This results in demand being limited by supply and leading to high external dependence on food imports, accompanied by the increase in prices in the domestic retail market, although maximum prices were set or capped in the State markets for some products, non-agricultural cooperatives, and more recently in free supply and demand markets (a measure also applied previously without success). The turnover of land was an important measure, it was necessary but not enough.

Among the sector’s unused potential is its ability to replace food imports. The Cuban economy has maintained a growing rhythm in food imports for more than 10 years: in 2018 it amounted to $2.2 billion, 19.5 percent of the total value of imports, and it is expected that the 2019 figure will exceed $2.3 billion, more than 21 percent of the country’s total imports, when the figures are finally published by the National Office of Statistics and Information (ONEI) .

Analyses and evaluations, based on a selection of food groups representative of the Cuban consumer, make it possible to deduce that imported products represent, for their value, between 65 and 69 percent of total availability. Using productive potentialities would reduce that dependency to between 35 and 40 percent. Everything seems to indicate that in recent times awareness of the role of the agricultural sector has been achieved, but practical performance is still insufficient.

Given the significance of the current situation faced by the Cuban economy, with the intensification of the economic blockade and the affectations of COVID-19, innovative, daring measures are now required more than ever, and not decisions that lead to greater centralization that do not favor the development of the productive forces.

Currently, there is a call for more centralizing measures, greater centralized control, and higher levels of contraction. These leave little margin for decision-making and autonomy for producers, made up of various productive forms — Credit and Services Cooperatives (CCS), Agricultural Production Cooperatives (CPA), Basic Units of Production and Consumption (UBPC), as well as private owners and producers. Also, many of these measures have been applied in the past without positive results.

Currently 88 percent of national production of plant-based foods is achieved in the non-state sector. The participation of the CCS and private producers amounts to 78.7 percent; as well as 35 percent of the production of food of animal origin and 65.2 percent of the production of milk. Precisely in this non-state sector (particularly the CCS, the CPA and the private producers, including the land usufructuaries) is where the support, investments and goods must be concentrated, and the promotion of the autonomy necessary in the management of the economic-production. Mere enthusiasm and speeches are not enough; the interests of these producers must be kept in mind.

The trend towards higher food prices in the domestic retail market is not new, although in recent times it has become worrisome, with severe economic, social and political implications. This trend is manifested by insufficient national production of agricultural products, which does not meet demand. It can be pointed out, then, that the problem does not lie in circulation, but in the insufficient availability of food, particularly in insufficient national production (supply).

The questions we must be asking: What are the difficulties that limit the sustained growth of agricultural and livestock production? Has idle land been turned over? Is the role of the market recognized or not? Are the measures implemented, or to be implemented, in the agricultural sector conceived with a systemic approach?

Initially, the current centralized economic management model, in force in the Cuban agricultural sector, needs to be replaced by a totally new economic-productivity management model, which should solve at least three fundamental problems in the country’s agricultural situation:

1. Achieving realization of the property throughout the production cycle: production-distribution-change-consumption. It is the right of the producer to be able to decide what to produce, how to combine the productive factors, to whom to sell, at what price, and to be able to go to a market of goods and means of production in a timely manner, with the aim of achieving successful closure of the production cycle. It will eliminate the high monopoly centralization and verticality in decisions, which must correspond to the producers, and promote the necessary production-value chain, starting from the territory. Production (economic) relations depend a lot on the realization of the property.

2. The recognition of the real and objective existence of the market, complemented by planning, bearing in mind the social requirements.

3. The application of the systemic approach throughout the production-distribution-change-consumption cycle; cost-price system and the necessary interrelation with macro and microeconomics.

Although there is still no published statistical information, it is known that the cold season (fourth quarter of the previous year and the beginning of this year), was seriously affected in terms of land preparation due to lack of fuel and insufficient availability of fertilizers and supplies for the control of pests and diseases as a result of the intensification of the blockade. Undoubtedly, the above will be reflected in lower results of production that, together with the low availability of foreign exchange — decrease in tourism income, reduction in income from other external services, insufficient production of the sugar harvest, debt commitments — will limit the financial capacity to import food.

The immediate and projected situation regarding the availability of food destined for the population appears complex. It is likely that significant deficits will be registered starting in May for the reasons cited above.

This strategic sector requires real priority and urgent decentralizing measures that promote the development of the productive forces!

Professor Armando Nova González has a PhD in Economic Sciences. He has authored books and works on economy and agriculture in Cuba. He has given classes and conferences in universities in Spain, the United States, Mexico and Canada.