Wednesday, February 16, 2011

Deregulation of food distribution taking shape

Deregulation of food distribution taking shape

In another step towards deregulation of food distribution and creation
of a de facto wholesale market to supply ailing private businesses at
non-convertible peso prices, the government is allowing sugar and
imported rice to be sold on "parallel food markets" at regulated
non-convertible peso (CUP) prices.

According to resolution 21/11 of the Interior Trade Ministry, the
introduction of rice and sugar in state-owned "Ideales" stores and
offer-and-demand farmers markets will be "gradual," suggesting the
staples wouldn't be taken off the ration booklet immediately. Resolution
20/11 increased the price of rice from 3.50 pesos CUP per pound to 5 pesos.

This means rice and sugar are now available at prices above the
subsidized levels on the ration booklet, but below those of
hard-currency stores. Monthly rice and sugar rations at rock-bottom CUP
prices — seven pounds of rice, three pounds of refined white sugar, and
one pound of brown sugar per person — typically only lasted up to two
weeks, forcing many Cubans to buy the staples at astronomical prices in
convertible pesos (CUC). Immediately after official daily Juventud
Rebelde announced the move Feb. 6, Cubans lined up in front of Ideales
outlets to buy Vietnamese rice.

Over the past three months, the government has issued more than 80,000
private business licenses, many of them in the food sector.

Restaurant owners and other private food service providers have
extensively used the black market for affordable supplies. Observers
have attributed recent bread shortages in subsidized state bakeries to
increased demand from businesses. Bread is available for pennies on
personal ration cards only in those bakeries.

"The deregulated sale of sugar … was a necessary and much-expected
decision, most of all for the sound development of the private sector,"
the Juventud Rebelde article said.

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