Monday, December 26, 2011

Retail Sector Reform

11:32 26Dec2011 RTRS-Cuba makes more reforms to retail sector

* Thousands of service outlets to be leased to workers

* In 2012, Cubans will be able to operate repair shops

* Reforms part of Cuban plans to "update" economy

By Marc Frank

HAVANA, Dec 26 (Reuters) - Cuba will open up more of the country's retail services to the private sector next year, allowing Cubans to operate various services such as appliance and watch repair, and locksmith and carpentry shops, official media reported on Monday.

The measures are the latest by President Raul Castro in his attempt to reinvigorate Cuba's struggling Soviet-style economy by reducing the role of the state and encouraging more private initiative.

A resolution published in the official gazette on Monday said the new reforms would take effect on Jan. 1.

Earlier this year, the Cuban government turned over some 1,500 state barbershops and beauty parlors to employees.

Former state employees now pay a monthly fee for the shop, purchase supplies, pay taxes and charge what the market will bear.

Shortly after Fidel Castro's 1959 revolution, all businesses in Cuba were taken over by the state. But since the former leader handed power to his brother in 2008, the policy has been openly criticized as a mistake.

Ordinary Cubans have long complained about dismal state services, including small retail services, which they say have deteriorated because of a theft of resources and a shortage of sufficient supplies from the government.

Cuba has been moving over the last year to liberalize regulations over private economic activity. Since then, tens of thousands of Cubans have taken out licenses "to work for themselves," a euphemism used by the government to describe operating mom-and-pop businesses.

Cuba plans to have 35 percent to 40 percent of the labor force working in the "non-state" sector by 2016, compared with 15 percent at the close of 2010.

Raul Castro, faced with stagnating production and mounting foreign debt, has made clear the economy must be overhauled if the socialist system he and his ailing brother Fidel installed is to survive.

Moving most retail services to the "non-state" sector is one of more than 300 reforms approved by the ruling Communist Party earlier this year to "update" the economy.

The measures aim to introduce market forces in the agriculture and retail services sectors, cut subsidies and lift restrictions on individual activity that once prohibited the sale and purchase of homes and cars.

On Monday, the Communist Party daily Granma said the moving of thousands of state retail services to a leasing arrangement would be done gradually throughout 2012.

Economy Minister Adel Yzquierdo Rodriguez told a year-end session of the National Assembly last week the number of state jobs would be reduced by 170,000 next year, with 240,000 new jobs likely to be added to the "non-state" sector.

Thousands of state taxi drivers are expected to move to leasing arrangements next year. Some state food services are also expected to be allowed to form cooperatives.

(Editing by Kevin Gray and Eric Beech)

Thursday, December 22, 2011

Land leases extended plus inheritance rights

Cuba sweetens pot for new private farmers

WASHINGTON, Dec 19 (Reuters) - * Size of leased plots increased five fold

* Leases lengthened from 10 to 25 years

* Land and improvements may now be passed on to family

By Marc Frank

HAVANA, Dec 19 (Reuters) - Cuba, trying to lure people back to the land and lift food production, has modified a land lease program so that private farmers can rent more land and keep it in their family as if they owned it, farmers said over the weekend.

The measures, adopted at a recent Council of Ministers meeting and not yet announced, are the latest loosening of the doctrinaire communism that has ruled Cuban agriculture policy for decades and were hailed by farmers as a step forward.

Farmers said in telephone interviews they were told in local meetings they will be able to lease up to 165 acres(67 hectares) from the state beginning in January, compared with the current maximum of 33 acres (13 hectares) mandated in a program

begun in 2008 .

They said the leases will extend for up to 25 years, compared with the current 10 years, and can be renewed and passed on to family members and in some cases laborers.

Farmers also will be allowed for the first time to build homes on the leased land and make other improvements under a regulation that guarantees the state will reimburse them if they lose their lease.

They had complained that the small size of the plots, short leases and other restrictions hampered production.

"These measures deal with many of the problems we face and give us security in terms of our work," Anselmo Hernandez, one of 150,000 people who have leased 4 million acres (1.6 million hectares) of land, said from eastern Cuba.

"Twenty-five years is a life-time of work and faced with whatever problem the family will be the benefactor of what we have done," he added.

Cuba nationalized most property after the 1959 revolution and the state owns more than 70 percent of the arable land on the Caribbean island. Private farmers, using only 24 percent of the land, were responsible for 57 percent of the food produced in Cuba in 2010, a local agricultural expert said.

The expert, asking for anonymity, said the new changes "amount to the state granting land to the private sector indefinitely under the guise of leasing, and no doubt most farmers expect that well before their lease is up they will get title to it."


President Raul Castro has made agriculture the centerpiece of his efforts to reform the stagnating, Soviet-style economy in favor of more local and private initiative, but food production has increased only slightly since he replaced his brother, Fidel Castro, in 2008 and remains below 2005 levels.

The country imports a budget-busting 60 percent to 70 percent of the food it consumes and the average age of farmers and laborers is now 50 years old.

Castro has decentralized decision-making on agricultural policy, increased prices paid for produce and promised farmers more freedom to grow and sell their crops.

In November new measures were announced making it easier for farmers to get bank credits and allowing them to sell produce directly to the tourism sector, bypassing the state.

They are all part of more than 300 reforms adopted by the ruling Communist Party at an April congress to "update" the economy.

Oscar Palacios, president of the "Antonio Briones Montoto" agricultural cooperative in the central town of Florida, said the new farming measures were "of enormous importance."

"Now producers will feel much more motivated and secure that the fruit of their labor will be theirs," he said.

"They bring farmers and their families closer to the land they work. They make them feel the land is really theirs."

(Editing by Jeff Franks and Anthony Boadle)