Monday, June 9, 2008

Growing profits

AP has an interesting story on Havana’s organoponicos, the small cooperatives that grow and sell food in Cuba’s cities, and calls tham a “stunning success.”

These urban gardens are not going to transform Cuba’s economy, but they are a clear success in that they generate jobs and higher-than-average income, and they provide just-picked produce for urban consumers at zero transportation cost. Raul Castro promoted them for all these reasons; the AP story says they are modeled after a project in Shanghai. They began in Cuba in 1995.

To me, in today’s context, the organoponicos are most interesting for the precedent they have set.

They are simple cooperatives where workers keep profits after covering production costs, land rent (if any), and any monthly payments for loans that paid for start-up costs such as clearing land and building sales stands and small storage buildings. There’s some more detail in this study (pdf) on page 11.

Could these profitable, stand-alone cooperatives be a model for future reforms in Cuba’s cities, where new jobs with higher incomes are needed, and the state has by its own admission failed to manage of its own small-scale service enterprises?

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