Cuban farmers in 'agony' waiting for promised reforms

Reuters News
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Posted: Apr 14, 2016 7:02 AM

By Marc Frank

ARTEMISA, Cuba (Reuters) - In Cuban farm country - between sugar cane, vegetable patches and overgrown fallow land a world away from Havana's tourist-filled streets - producers are seething at what they say is the government's backsliding on promised market reforms to make their lives better.

"It is still agony to farm," said 36-year-old Martin, whose attempts to grow more vegetables near Artemisa in western Cuba have been thwarted by the government's monopoly on distributing fuel, fertilizer and seeds, which are often in short supply.

Already covered with sweat and mud at 9 a.m., Martin swept his hand towards his crop of cabbage and chard and said he spent 8,000 pesos ($330) on seed in the black market but that price controls reinstated since January to tackle inflation mean he will make a loss.

Some of his fields are bare because the government did not give him the seed and other inputs he needed. "I didn't have the money to buy them on the street."

Irritation over the pace of market-style reforms to one of world's last Soviet-style command economies mean these issues will be high on the agenda when the Cuban Communist Party convenes its 7th congress on Saturday.

It wasn't supposed to be like this. At its last congress in 2011, the party vowed to implement market measures to free up more private enterprise and boost economic growth by 2015.

The government leased fallow fields to farmers and promised to let them buy pesticides, fertilizers and other supplies at wholesale markets instead of waiting for the government to assign them products. It began to allow farmers to distribute produce directly to vendors and consumers.

Enough was done elsewhere in the economy to allow some small businesses to blossom and create a nascent middle class. Along with Internet access and more freedom to travel, a detente with the United States and a related surge in tourism, it has given some Cubans greater opportunities and hopes for more.

But only a fifth of the reforms planned in 2011 have been fully implemented, according to the Communist Party's own newspaper, Granma. Wholesale markets have not yet materialized, making it hard for farmers to keep up with rising demand from the new middle class and private sector restaurants.

Consecutive droughts added to their woes.

Food prices rose so in January the government balked and took a step back, shutting down some private street vendors and buying, distributing and selling more food in its own fixed price markets, a model that in the past stifled production.

Uncultivated farmland still dots the countryside and Cuba imports 60 percent of its food needs, at an annual cost of $2 billion of scarce currency reserves.

Cuba's rural problems played a role in holding back economic growth to an average of 3 percent since 2011, below the goal of 5 percent. Despite booming tourism, the forecast is for 2 percent in 2016.

Martin, leaning against an old rusting tractor, said that for farmers the reforms have been “a farce.”

"They say we can’t do as we please with our produce because there is not enough food. Why is there not enough? Because there is nothing to work with! No fuel, no fertilizer, no pesticide, no nothing,” he said, visibly annoyed. He asked that his last name not be used.

The government's decision to reassert control over food distribution has led to tomatoes and bananas rotting in the fields in the province of Artemisa, two farmers said, because government trucks do not arrive on time to collect harvests.

Such problems bode poorly for foreign companies looking to find a new market in Cuba as the United States relaxes its investment restrictions.

WHOLESALE HEADACHES

The four-day congress starting on Saturday will signal whether President Raul Castro's government recommits to its reforms or whether conservatives who want to slow the move away from socialist economics gain more ground.

Castro has in the past scolded mid-ranking officials and party cadres for resisting change, but the spike in prices and rising inequality gave traditionalists ammunition in their fight to slow things down.

Plans to transform thousands of small and medium-sized state businesses into cooperatives have run into a wall of bureaucratic tangles and stalling.

A mid-level public administrator in Havana said only 25 of 120 state-run eateries in the city that were supposed to become cooperatives have made the switch.

"They need to take credible action to move forward more quickly. In politics there is a clock ticking, one of economic expectations, especially since December 2014 when normalization with the United States began," said Raul Hernandez, editor of Temas, a reform-oriented magazine.

Cubans rely heavily on creativity to find transport, afford and purchase basics like toilet paper and detergent, or parts for their bicycles, motorcycles and cars.

Many are hopeful that measures such as unifying Cuba's dual currencies will finally be implemented after the congress.

For now, farmers and small businesses - like the restaurant visited by U.S. President Barack Obama in Havana last month - have to purchase supplies at retail prices, raising their costs. Others turn to the black market.

In a move to quell the griping, the government on Tuesday unveiled a plan to allow some cooperatives and small businesses, including restaurants, to buy supplies from producers and wholesalers. The measures do not include any private businesses not formerly in state hands.

The reticence to unleash private sector demand in part reflects Cuba's weak public finances because the government has a monopoly on foreign trade so must bear the cost of imports.

Cuba has improved its financial credibility over the last five years, running trade and current account surpluses and restructuring $50 billion in mainly old debt.

But weak global commodity prices have hit income from the sale of professional services to allied oil producing nations such as Venezuela, making it harder for Cuba to buy imports such as the farm products Martin would like to buy wholesale.

Snack shop owner Juan Perez said he benefited from reforms that allow him to run a business, but that the high cost of ingredients mean he and his wife and two grown children net a total of only around $150 a month.

At a junction in Guanajay, a town in Artemisa province, he offers a small menu of juice, coffee, rolls with ham and mayonnaise, and pudding.

“We used to do a good business selling pizza. But we had to go to Havana in search of tomato sauce, flour and cheese when we got word it had appeared on the shelves. Many times it was gone when we arrived. We gave up,” he said.

(Additional reporting by Nelson Acosta; Editing by Kieran Murray)