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Cuba's agricultural sector
isn't what it used to be
By Michael Braga. June
16, 2004. Sarasota
Herald-Tribune, FL.
When Ocala rancher Leroy Baldwin visited
Cuba last year, he couldn't believe how
puny the cattle looked.
"Cuba had doggone good cattle before
1960, but they've slid backwards due to
inbreeding and lack of good pastures and
feed," Baldwin said. "It's gotten
to the point where 2-year-old animals have
no more meat on their bones than a deer
in this country."
Other observers have witnessed the same
sort of deterioration in other sectors of
Cuba's agricultural industry.
Sugar is a prime example.
The country produced only 2.1 million tons
of sugar last year, the lowest amount since
1912, and down more than 60 percent from
1959.
Once one of the largest exporters of sugar
in the world, Cuba has actually gotten to
the point of having to import the sweet
stuff.
"As a company we produce almost as
much sugar as Cuba as a country, and that
kind of blows their minds," said Pepe
Fanjul, president of West Palm Beach-based
Florida Crystals. Fanjul's sugar-producing
family left Cuba after Fidel Castro took
power.
Although poor management is partially responsible
for the results in Cuba, much of the blame
can be attributed to the demise of the Soviet
Union and the abrupt termination of the
nearly $5 billion in subsidies and economic
assistance it once provided to the island.
Before its breakup in 1991, the Soviet
Union bought sugar from Cuba at higher than
world market prices and sold oil and other
inputs at lower than market prices.
With the end of those subsidies, Cuba could
no longer afford as much fuel, fertilizers,
pesticides, spare parts, animal feed and
veterinary medicines.
Its agricultural production plummeted,
dropping 54 percent by 1994, according to
a study published by the U.S. Department
of Agriculture.
In turn, food consumption fell 36 percent
and the population's daily per-capita caloric
intake dropped from 2,908 in the 1980s to
1,863 calories in 1993 -- well below the
USDA-recommended minimum of 2,100 calories
per day.
The situation prompted tens of thousands
of Cubans to flee the island on makeshift
rafts, creating an international humanitarian
crisis.
On the upswing
"In 1993-94 things bottomed out and
Cuba has seen growth every year since then,"
said William A. Messina, an agricultural
economist at the University of Florida's
Institute of Food and Agricultural Sciences.
Messina attributes the turnaround to economic
changes made by the Castro government.
Land that used to be managed by large and
inefficient state farms was turned over
to much smaller agricultural cooperatives,
called "UBPCs." Those production
units are required to buy supplies and sell
a portion of their output to the state,
but any surplus can be sold at free-market
prices, providing an incentive to maximize
production.
At the same time, the government legalized
the establishment of farmers' markets.
"This was a source of tremendous enthusiasm,"
Messina said. "Everyone producing agricultural
products had a right to sell surpluses in
these markets."
In addition, the government began establishing
joint-venture partnerships with foreign
companies in select sectors of the economy.
Investors from Israel and Chile sank money
into citrus groves. Their counterparts from
Spain, France, Brazil and Turkey invested
in tobacco, while Spaniards, Canadians,
Germans and Jamaicans began building hotels.
All told, 540 joint ventures have been
established since 1989, and about 400 are
still in business today.
As a result, agricultural production has
risen rapidly, while per-capita caloric
intake has climbed back to 1989 levels.
Chronic shortages of fertilizers, pesticides,
fuel and spare parts still plague the country,
but Cuban farmers have learned to adapt.
They have substituted horses and oxen for
tractors and have begun farming organically.
The bad news is that yields have fallen.
The good news is that Cubans have developed
techniques that might prove to be an advantage
in the future given the growing demand for
organic produce.
"That could be a whole new niche for
them when things open up," Messina
said.
More demand
Meanwhile, Cuba's tourist industry has
exploded. The number of visitors traveling
to the island increased to 1.9 million in
2003 from just 300,000 in 1989, creating
more demand for food and agricultural products.
Mainly because of the successful joint
ventures with foreign companies, the Cuban
agricultural sector has risen to the challenge.
It's now able to supply 65 percent of food
and vegetables sold at tourist hotels and
restaurants, up from just 12 percent in
1990, according to Cuban government estimates.
"One national brewery, a joint venture,
supplies about 95 percent of the tourist
market for beer, and another joint venture
supplies almost all the bottled water,"
said James E. Ross, a University of Florida
agricultural economist.
The Cuban government is continuing to build
more hotels, and as long as tourists keep
showing up in greater numbers, the demand
for food will keep rising.
If restrictions on the ability of U.S citizens
to visit the island are lifted, demand should
skyrocket.
Parr Rosson, an agricultural economist
at Texas A&M University, estimated that
if 1.5 million U.S. tourists traveled to
Cuba every year and spent $30 to $60 per
day for a week, it would generate demand
for $126 million to $252 million in U.S.
agricultural exports.
Rosson said that's not a lot for the United
States, which exports $59 billion in agricultural
products each year, but "any time we
can open a new market it's important."
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