Sunday, December 16, 2012

Cuba's Free-Market Farm Experiment Yields a Meager Crop

Cuba's Free-Market Farm Experiment Yields a Meager Crop

Feeding the People in Cuba: Last year, President Raúl Castro legalized
small agricultural businesses as part of an effort to revive the economy.
Published: December 8, 2012

HAVANA — Cuba's liveliest experiment with capitalism unfolds every night
in a dirt lot on the edge of the capital, where Truman-era trucks
lugging fresh produce meet up with hundreds of buyers on creaking
bicycle carts clutching wads of cash.

"This place, it feeds all of Havana," said Misael Toledo, 37, who owns
three small food stores in the city. "Before, you could only buy or sell
in the markets of Fidel."

The agriculture exchange, which sprang up last year after the Cuban
government legalized a broader range of small businesses, is a vivid
sign of both how much the country has changed, and of all the political
and practical limitations that continue to hold it back.

President Raúl Castro has made agriculture priority No. 1 in his attempt
to remake the country. He used his first major presidential address in
2007 to zero in on farming, describing weeds conquering fallow fields
and the need to ensure that "anyone who wants can drink a glass of milk."

No other industry has seen as much liberalization, with a steady rollout
of incentives for farmers. And Mr. Castro has been explicit about his
reasoning: increasing efficiency and food production to replace imports
that cost Cuba hundreds of millions of dollars a year is a matter "of
national security."

Yet at this point, by most measures, the project has failed. Because of
waste, poor management, policy constraints, transportation limits, theft
and other problems, overall efficiency has dropped: many Cubans are
actually seeing less food at private markets. That is the case despite
an increase in the number of farmers and production gains for certain
items. A recent study from the University of Havana showed that market
prices jumped by nearly 20 percent in 2011 alone. And food imports
increased to an estimated $1.7 billion last year, up from $1.4 billion
in 2006.

"It's the first instance of Cuba's leader not being able to get done
what he said he would," said Jorge I. Domínguez, vice provost for
international affairs at Harvard, who left Cuba as a boy. "The published
statistical results are really very discouraging."

A major cause: poor transportation, as trucks are in short supply, and
the aging ones that exist often break down.

In 2009, hundreds of tons of tomatoes, part of a bumper crop that year,
rotted because of a lack of transportation by the government agency
charged with bringing food to processing centers.

"It's worse when it rains," said Javier González, 27, a farmer in
Artemisa Province who described often seeing crops wilt and rot because
they were not picked up.

Behind him were the 33 fertile, rent-free acres he had been granted as
part of a program Mr. Castro introduced in 2008 to encourage rural
residents to work the land. After clearing it himself and planting a
variety of crops, Mr. Gonzalez said, he was doing relatively well and
earned more last year than his father, who is a doctor, did.

But Cuba's inefficiencies gnawed at him. Smart, strong, and ambitious,
he had expansion plans in mind, even as in his hand he held a wrench. He
was repairing a tractor part meant to be grading land. It was broken. Again.

The 1980s Soviet model tractor he bought from another farmer was as
about good as it gets in Cuba. The Cuban government maintains a monopoly
on selling anything new, and there simply is not enough of anything —
fertilizer, or sometimes even machetes — to go around.

Government economists are aware of the problem. "If you give people land
and no resources, it doesn't matter what happens on the land," said
Joaquin Infante of the Havana-based Cuban National Association of

But Mr. Castro has refused to allow what many farmers and experts see as
an obvious solution to the shortages of transportation and equipment:
Let people import supplies on their own. "It's about control," said
Philip Peters, a Cuba analyst with the Lexington Institute, a
Virginia-based research group.

Other analysts agree, noting that though the agricultural reforms have
gone farther than other changes — like those that allow for
self-employment — they remain constrained by politics.

"The government is not ready to let go," said Ted Henken, a Latin
American studies professor at Baruch College. "They are sending the
message that they want to let go, or are trying to let go, but what they
have is still a mechanism of control."

For many farmers, that explains why land leases last for 10 years with a
chance to renew, not indefinitely or the 99 years offered to foreign
developers. It is also why many farmers say they will not build homes on
the land they lease, despite a concession this year to allow doing so.

Mistrust is widespread. To get the growth Mr. Castro wants in
agriculture and the economy, people need to trust the government,
analysts say. But after half a century of strict control, many Cubans
doubt proclamations from officials, who insist that this time, despite
previous crackdowns, private enterprise will be supported.

Some farmers still wonder when the government is going to swoop in and
take what they have built.

"What concerns me is that in a place like this, after five or six years
the state might need the land to complete some kind of project," said
Reinaldo Berdecia, who is raising cows outside Havana.

Cubans also say they worry that the bureaucrats responsible for managing
the country's complex mix of state-run and private agriculture lack the
knowledge needed to make the system work. In the fall, there were piles
of bananas rotting all over Havana, for example. Farmers say the
government guaranteed a price that was too high, failing to recognize
that because bananas require less investment and their planting season
is short, farmers would overproduce.

At a recent visit to the market near the Havana airport, these
frustrations, hopes and fears were on view. From the backs of trucks as
old as retirees, sunburned farmers in black rubber boots tossed onions,
lettuce and other items to colleagues who weighed them for sale, as a
crush of buyers approached. Every truck that arrived was immediately
surrounded, mostly by young men shouting and elbowing for access.

It was a sign that demand still outpaces supply, and in the middle of
the rush to buy wholesale, not everyone seemed certain free markets were
the way to go. Wary government inspectors watched for sales occurring
before the official start time of 6 p.m. Jose Ramón Murgado, 40, a
member of the farmers union, said the government had introduced too much
chaos into the system.

"Capitalism means higher prices," he said. "That's the problem."

But high prices were also leading to adaptation and efficiency. Some
farmers from eastern Cuba said they held back loads of onions, a chief
ingredient in sofrito sauce, a basis of Cuban cuisine, until after
harvest season, because they could earn more per pound. Other farmers
watching nearby seemed ready to follow their lead.

For Mr. Castro and his government, the success or failure of the reforms
with agriculture and other parts of the economy may come down to these
innovators who inspire others to greater productivity — people like Mr.
Toledo, the owner of three small stores that he supplies with produce
from the market.

He spent a decade driving trucks in Florida and Spain, and with
confidence, a few extra pounds and some money saved, he returned a year
ago to take advantage of Cuba's new opportunities.

He has his own truck now, along with six employees scouring the market
for deals. Agriculture has given him a boost, as it has others who have
taken a chance on private farming. But the question many across Cuba are
asking is: How far will Mr. Castro's socialist government let them rise?

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