Granma: No price controls in agros, for now

Last week I noted an AP article about a farmers market in Havana where word came down from Communist Party officials that price controls would be imposed November 1, and trouble ensued as consumers and vendors feared that supply might dry up.

According to the AP report, the price controls have been postponed until January.

Granma, the party’s official newspaper, has responded with an article that doesn’t exactly clear up the situation.

Much of the article deals with markets where the state, not private vendors, is in charge, and there is a problem of uneven supply. An official is cited saying that the “first steps” toward a solution have been taken by improving the “logistics chain.”

Regarding the non-state agros, these are the key points:

• The article notes that at these markets, where farmers and cooperatives sell their surplus at uncontrolled prices, products are sold for the same price throughout each market, as if vendors have all agreed on them. Prices do differ from market to market, seemingly based on neighborhood income. Both these observations square with what I have seen over the years.

• It quotes consumers saying that “extreme” measures could result in supplies drying up, and states the open-ended question whether the state should intervene in some unspecified way “to regulate supply.”

• It says that the November 1 measures include documenting the origin of the products that each vendor sells. (The regulations have long required that the vendors either be the farmer or a designated representative of the farmer or cooperative. Compliance with this requirement has been scant; in practice, vendors gather before dawn as trucks come into town, buy from the trucker/wholesalers, then get to work.)

• The article doesn’t say what else is included in the November 1 measures.

• The reporters went to the market in Havana’s Playa neighborhood where the disturbance took place and found that only five vendors had proper documentation. They attributed the “traumatic experiences” at the market to inadequate explanation of regulatory changes.

So will price controls be imposed?

The article doesn’t say. It quotes one official saying that “there will always be spaces for free competition” in these markets where producers sell their surplus after meeting the quota they owe to the state, and where they sell particular products “that cannot or should not follow the logic of state distribution.” The administrator of the Playa market says, “‘Intermediary’ is not the synonym of ‘thief’ or ‘speculator.’” Another official says that if the state ensures that regulations are followed, “there is no reason to arrive at extreme situations.”

Add it all up, and it sounds like a signal that the state is acknowledging the risks involved in imposing price controls, but is keeping the option open. And it sounds like transporters and vendors have a little more paperwork in their future.

A report I did in 2000 on the farmers markets is here (pdf).