Many of the policy changes made so far under Raul Castro involve public investment (the new bus fleet), ending nuisance regulations (pharmacies), or allowing Cubans to buy things previously off-limits (cell phones, hotels, computers, dvd’s). I don’t scoff at these changes, but they are not big economic policy measures geared to generating increased output, jobs, and incomes.
Agriculture seems to be a different story, where the “structural” changes called for by Raul Castro may indeed come into being.
Right up front, one has to say that Americans – with our agricultural subsidies, government-driven land allocations, and distortion of market signals through tariffs, ethanol mandates, and other measures – are not in the best position to discuss “socialist” farm policies in
Since the economic crisis of the early 1990’s,
These are the changes under way:
● Idle lands are being distributed to private farmers – the most productive of all
● The agriculture ministry bureaucracy is being reorganized, and decisionmaking is being decentralized. Offices are being created at the municipal level, with the promise that decisions once made by central authorities will be made in
● Producers are increasingly selling directly to local state institutions (schools, hospitals, businesses) instead of selling to a state enterprise that would then distribute the product. This report says that the “intermediary enterprises” will “become providers of services” to cooperatives. This article discusses the same thing. (It used to be that discussion of eliminating “intermediaries” meant going after those Cubans who earn a living by transporting produce and re-selling it to vendors in the farmers markets. There has never been a real crackdown on these alleged profiteers, surely because the markets would grind to a halt without them.)
● Stores are being created where farmers can buy tools, and farmers are being given credit to make purchases at these stores. This is a small step to reverse an absurd, decades-long policy where the state distributed supplies of its choosing, when it chose, to whom it chose – and farmers’ actual needs were not a driving factor.
● On a lighter note, when it comes to getting rid of marabu, the bush that takes over idle fields, Granma reports that two guys in Las Tunas have found a great way to kill it: flood the fields for 72 hours, clear the field, then plant something else.
If you sum this all up, it looks promising. One step alone, the distribution of additional land to private farmers, is almost guaranteed to raise production and put
The key to the incentive structure for all agricultural producers in
Finally, there has been talk of eliminating the libreta, the ration book that is the mechanism for distributing heavily subsidized staples to every Cuban household. And we are seeing reports that there is a decreasing reliance on the state as the buyer, transporter, and distributor of food, and increasing use of direct sales to end-users. If the result of all this is elimination of the huge state distribution system in agriculture (the acopio) and a new policy where the state abandons mass rationing and instead targets food aid to those in need, that would mark a very large “structural” change, one that could point to later policy moves in other economic sectors.