Monday, July 2, 2007

Raul 1, Bureaucracy 0

Last December, Raul Castro said the revolution is “tired of excuses” given for chronic problems in transportation and agriculture. In a National Assembly session, he asked how farmers can be expected to produce and deliver to market if the state fails to pay them for the goods they deliver.

They system responded. Last week, Cuba’s finance minister said the government paid 550 million pesos to settle debts with farmers, clearing all debts from the last six months, and it refinanced debts totaling another 863 million pesos. A system to track payments and prevent late payments has also reportedly been instituted.

Additionally, prices paid to farmers for beef and milk have been increased by 250 percent.

AP reports that farm production was down seven percent last year.

These new measures fix problems within the current system, rather than reform the system. Yet they should produce results. If the state pays farmers more promptly and reliably, and if beef and milk prices go up, one can expect that producers will respond, just as they responded to the incentives they received in 1993 when they were permitted to sell their surplus on the open market.

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