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CUBA
Winds of change
Lucila Horta
4/30/2008
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Government seeks to revitalize production sectors and move stagnant money.

Remigio Galarraga is a campesino farmer in the Pinar del Rio province. He cultivates 13 hectares (32 acres) and says he used to face hurdles to expanding as a producer, due to state restrictions in marketing produce. But now he sells directly to the state and on the open market.

A month after President Raúl Castro took office on Feb. 24, the government officially announced that municipal farming delegations will no longer be merely bearers of complaints and will become an active player in decision making and resource assignment.

Vice Minister of Agriculture Alcides López said in March that these delegations will have more decentralized power, including the distribution of land, credits and seeds without approval from higher governmental authorities.

Castro insisted that food production is a national security issue.
Another change is the opening in four provinces of farming tool stores, which now sell items previously distributed only by the government.

In mid-2007 the government increased the price of milk from 1 to 2.50 pesos, and on January added 0.2 convertible pesos — the national currency that replaced the US dollar in 1994, equivalent to 24 regular pesos — to allow producers to purchase supplies. The prices of coconut, cacao, tobacco, coffee and potatoes increased and similar hikes are expected for other foods, and the state will give funds to revamp or buy new machinery for the farming industry.

“It’s worth it with these prices,” says Aracelio Gámez, in his farm in Guira de Melena, in the province of Havana, where he grows mostly potatoes. “I’m thinking about asking for more land,” he said, adding that if he earns more he could pay for employees to work a larger area of land. Now, only members of his family farmed the land.

Working toward food security
The state-run farming industry did have eras of abundances until the 1990s financial crisis, when unowned plots of land were given to 350,000 people, who along with 225,000 private land-owners, either independent or organized into cooperatives, who had received land since the 1959 land reform, now hold 35 percent of Cuba’s arable land and produce 60 percent of the island’s food.

In order to broaden this initiative ,rapid changes were needed. Lugo Fonte, president of the National Small-Scale Farmers’ Association, or ANAP, said that a future law will outline the “massive distribution” of idle land — half of Cuba’s farmland is idle or underutilized. He also referred to a Land Control Center, a government agency that would regulate the new measures.

Raúl Chirino, an ANAP official, says that these actions are seeking for the country to become self-sufficient because international food prices leave it with no other choice. Eighty percent of the country’s food is imported, most of which is sold to the population after being subsidized by the state. Cuba imports some US$1.5 billion a year in food from the United States, France, China, Brazil and other countries. But Cuban officials say that amount will increase an additional $300 million this year because of higher prices.

Hotels and appliances
Cubans can now stay at hotels that since the mid-1990s were reserved only for tourists, with the exception of newlyweds, who could pay for rooms in the national currency. The least expensive rooms cost around 50 convertible pesos per night, and even so there has been a flood of reservations at five-star hotels. Hotel managers say that there are thousands of reservations already for summer as vacationing Cubans enjoy a service they have not enjoyed for at least a decade.

Also, housewares have gone back on sale after they had been taken off the market because they consumed too much electricity. In shops that sold in foreign currency there always was a high demand for both cheap and luxury refrigerators and ovens, furniture and other household items. But now items such as microwaves, freezers and motorcycles have piqued an immediate interest in a sector that can afford them.

Consumers now form long lines to purchase cellular telephones. To open a line costs 110 convertible pesos without paying for the equipment. Before, Cubans subcontracted phones from foreigners or they were given them from their jobs.

The new changes will not benefit the entire population equally, but rather they highlight the differences in class that have been developing since the use of the dollar was authorized in 1994 and the convertible peso began to be used as a part of salaries in some sectors: tourism, telecommunications, the nickel industry and mixed companies.

According to Omar Everleny, deputy director of the Center for Economic Studies at La Havana University, there are some 200 million convertible Cuban pesos circulating in the country, and 21 billion pesos, besides the foreign currency sent by Cubans living abroad.


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