The Decline of Tobacco in Cuba

The Decline of Tobacco in Cuba
DIMAS CASTELLANOS | La Habana | 15 de Julio de 2016 - 10:47 CEST.

The tobacco plant, known in South America for thousands of years, was
used by Cuba's indigenous people as a medication and a narcotic. They
smoked it, sniffed it, drank concoctions of it, and employed it in
religious rituals.

Unlike cattle and coffee, which was transported from Spain to the
Americas, tobacco made the opposite journey. It was carried from Cuba to
Spain by Rodrigo de Jeréz and Luis de Torres, two members of Christopher
Columbus's crew during his first voyage to the New World in 1492.

Its commercial cultivation was initiated on the banks of rivers by
Spanish emigrants who, establishing themselves in Cuba, thereby becoming
criollos, came to constitute the Cuban peasant class. The leaf's
cultivation - which, due to the care, delicacy and attention to detail
it demanded, could not be produced by slaves - was carried out by these
emigrants, known as vegueros.

Because of the demand for it in Europe and the quality of the Cuban soil
in areas of the country like Vuelta Abajo, located in the western
province of Pinar del Río, and the region of Sancti Spiritus, in the
center of the Island, from the late 17th century until the first quarter
of the 18th tobacco was the country's leading source of revenue.

Although between the late 18th and early 19th centuries it was surpassed
by sugar and coffee, tobacco represented, and continues to represent,
Cuba's flagship product in terms of employment and contribution to GDP.

In 1958 tobacco production in Cuba had hit 58,202 tons. However, for the
reasons stated above, there was a drop so severe that today, in 2016,
the 27,000 tons produced is touted as a great achievement – less than
half of what was produced almost six decades ago, and similar to the
annual averages way back in the period from 1904 to 1910: 27,384 tons.

The problem is that the State has decided to provide landowners and
usufruct right holders with minimal resources, but without giving up its
monopolistic control – similar to what Spain did prior to 1817, when the
vegueros finally managed to overturn the monopoly known as the Estanco
del Tabaco, and landowners began to freely sell their crops, its sale
depending on its quality.

With tobacco, as with the rest of Cuba's agricultural production, the
revolutionary Government that took power in 1959, ignorant of the
characteristics of its cultivation, and the laws governing economic
phenomena, attempted to boost production on State lands using wage
labor. Failing in this, it then sought to do so through its "Basic Units
of Cooperative Production." But as the State continued to retain
ownership of the land, this also failed.

In 2008 the Government of Raúl Castro began to distribute part of these
lands on the basis of individual usufruct rights, with the aim of
incentivizing higher production, but this has not yielded the expected
results either. The futility of these measures is evident after
examining the production figures from 2009 to 2014, during which it fell
by 21%.

The figures demonstrate an ascending relationship between the production
of employees on State-owned land, that of usufruct holders, and that of
farmers who actually own the land they cultivate. Several months ago,
chatting with farm workers in the municipality of San Juan y Martínez,
in Pinar del Rio – one of Cuba's highest-producing areas, accounting for
some 70% of the leaves used in the industry to make Cuba's signature,
hand-rolled Habanos cigars – they explained to me that because of the
damage caused by the unseasonable rains, and the high relative humidity,
the tobacco harvest in the province suffered losses that will damage the
current 2015-2016 campaign. However, it is revealing that, between
owners and usufruct holders, the largest losses were suffered by the
latter; which brings to mind the old saying that: "there is nobody
blinder than he who does not want to see."

The decline in tobacco production is due to the fact that current
conditions are similar to those of two centuries ago: the farmer has to
sell all the tobacco he produces to a State monopoly, at the price it
sets. In return they are allowed to keep 1% of the production for
smoking (personal consumption), but with a ban on its sale to third
parties, forcing them to sell it covertly to compensate for their low
earnings just to survive. They are also prevented from participating in
the production process after the drying of the leaves, with the State
taking charge, exclusively, of the rest of the productive activities,
which are those that return the highest profits.

The conditions imposed on producers of tobacco are more abusive because
State officials responsible for their commercialization decide on its
quality, which determines its purchase price, and the farmer is almost
always adversely affected.

It is these negative factors that generally account for the decline in
tobacco production. To solve the problem, according to the farmers I
talked with, there are four essential factors involved in the production
that must be taken into account: the cooperative, the bank, insurance,
and sales – without which it is impossible to achieve the sustained
growth of tobacco production and the productivity that the country and
its farmers need. The solutions would be:

1) Allowing usufruct holders to become landowners and, from there, along
with those who are already owners, permitting their participation in the
entire production process, not only in that of the tobacco leaves. 2)
Acknowledging the right of free association for cooperation and the
defense of their interests. 3) Giving usufruct holders the legal status
required to receive loans directly and not only through cooperatives
created by the State for this purpose. 4) Allowing farmers to freely
sell their crops.

If these measures are not taken, it will be impossible to bolster
tobacco production in a sustained manner – an industry in which the
country boasts all the right climatic characteristics, experience and
expertise, and a tradition that makes the Habano famous worldwide.

Source: The Decline of Tobacco in Cuba | Diario de Cuba -
http://www.diariodecuba.com/cuba/1468572479_23858.html