Monday, November 21, 2011

A better deal

One of the absurdities of Cuba’s economy is the small item in trade accounts identifying the importation of fruits and vegetables, largely for the tourist industry.

I suppose it’s possible that the fresh produce demands of hotels and restaurants can’t be fully satisfied year-round by Cuban agriculture, due to climate and seasonal cycles. But the real reason for the imports, and the uneven supply in hotels and restaurants, has to do with Cuban policy.

I made a mid-winter trip to Cuba recently and found wonderful tomatoes in abundance in homes and private restaurants. I then ate in some state restaurants where the salad offerings included cabbage and carrots, i.e. things that can be refrigerated for weeks.

Why? Because the government regulates the sale and distribution of food, and its scheme has not allowed farmers to sell directly to tourism installations. Cuban chefs in these establishments have to take what a clunky state enterprise offers. Unlike chefs anywhere else in the world, they can’t start their day by going to a farmers market or, better yet, by receiving the produce that they have contracted for a farm to deliver every day.

Until December 1.

An article in today’s Granma and new regulations published in the Gaceta Oficial announce that as of that date, direct contracting will be permitted. The state enterprise that now performs this task (the Empresa de Frutas Selectas, I believe) will not disappear, but it will have competition.

The idea, Granma explains, is to reduce spoilage, “to simplify the links between the primary producer and final consumer,” and to allow tourism installations to “take better advantage of the potential of all the forms of production at the local level.”

This decision may not be the most important in the economic reform battles, but it represents a loss for bureaucratic control freaks, a win for reformers, a win for farmers and people in the tourism industry who can now do their jobs better, a victory for decentralization, and one more sign that Cuba’s reformist government is willing to give up control and allow markets to function where planning has failed.


Anonymous said...

This type of situation is prevalent in all of the Cuban economy and is a direct reflection of the short-shortsightedness of a centralized economy. Tourism = hard currency = state must control all inputs... even at the expense of inefficiencies.

There a thousands of examples in the economy where rules and controls were put in place to try and maximize the cash flow to the state (or not to others) and they have become so ingrain and convoluted that no one knows their original purpose, only that they are suppose to follow the rules, no matter how counter intuitive they have become. This is a huge obstacle facing almost all facets of the Cuban economy.

brianmack said...

Great news for the farmers, better news for the hotels and tourist industry. Funny, I think there are places in the USA where restaurants must deal with approved distributors.
This news item from Cuba is revolutionary.

Antonio said...

I beg to differ with you a little, Peter. I think this is huge. If only this had happened 10- 15 years ago, then all the talk of Cuba following the Chinese or Vietnamese model would actually make sense and Cuba might not be importing 85% of its food. You make a great point in saying that the losers are the bureaucratic control freaks.

Let us remember that Cuba did try something like this on a smaller scale before. In the mid-1980s, Cuba embarked on a program called the “Rectification of errors” where farmers were given more leeway as far as selling their produce. There was an almost immediate appearance of produce that had all but disappeared from Cuban tables, most notably garlic.

However, Fidel soon had the small farmers’ markets shut down. He claimed to have done it to end the exploitation of farmers by middlemen, and demonized the supposed “Garlic Millionaires” who had crawled out from under some rock to take advantage of farmers. Thus was born the myth of the garlic millionaire, everyone in Cuba had heard of one, but nobody actually knew any.

I think the ultimate measure of the success of these reforms might be measured in the ease with which Cubans will be able to purchase food locally. I grew up in a third world city just slightly larger than Havana, and although we shopped at supermarkets, we also bought fresh fruit and vegetables from local street vendors that were always just around the corner. I have always been shocked at the absence of these vendors in Cuba and in the rare occurrence of one, just how pathetic their products were. This was in working class barrios of Havana (Marianao and Lawton) and also Santiago.

Lizzie Barbie said...

That is terrible. Of course I never ate at a tourist restaurant while I lived in Cuba but I think they should at least have their own government farms or something, frozen food is terrible!!! After I moved out of Cuba I started hating food, US food is awful (old and frozen) I want to go back to picking up fruits from my backyard, buying fish at the beach the same day they were caught, huge tomatoes from my yard and roasting pigs for new year's...sigh

Nueva seguidora.

John McAuliff said...

This should create an opportunity for the big hotels to contract in advance with private farmers and cooperatives, provide them with seed, fertilizer, tools, insecticide and technical expertise to assure a steady supply of quality produce.

John McAuliff
Fund for Reconciliation and Development