Cuba accepts Brazilian investment in its most emblematic economic sector: sugar
Posted on January 31, 2012
(Reuters).—The Brazilian giant Odebrecht plans to produce sugar in Cuba, the company reported Monday in the first injection of foreign capital in a sector so far closed in the communist-ruled island.
Odebrecht Group signed with the state of Cuban Sugar Business Administration a “productive management contract” to wit “September 5″ in the central province of Cienfuegos.
“The agreement for a period of 10 years is to increase sugar production and milling capacity and help the revitalization” of the industry, Odebrecht said in an email sent to Reuters through his press office.
The project would open to foreign capital, the underfunded Cuba’s sugar industry, whose production has plummeted from about 8.0 million tons in the 1970s to just 1.2 million tonnes in the last harvest. In addition, it will deepen Brazil’s role in modernizing the dilapidated productive infrastructure of the island.
Odebrecht did not elaborate.
But a Brazilian sugar industry executive told Reuters that the contract could be signed this week during a visit to Cuba, Brazilian President Dilma Rousseff. Cuba allowed more than a decade, the inflow of foreign capital to develop other strategic industries such as tourism and oil recently, where a consortium led by Repsol-YPF this year will begin to explore Cuban waters in the Gulf of Mexico.
Private companies from other countries have spent years negotiating its entry into the sugar industry in Cuba, nationalized shortly after Fidel Castro’s revolution in 1959. The opening comes after a major restructuring of the industry in late 2011 as part of the efforts of President Raul Castro to modernize the island’s socialist economy.
Do you also ethanol?
According to the director of the Brazilian sugar industry with knowledge of the project, Odebrecht also produce ethanol from biomass energy in Cuba. “Cuba is opening up the possibility of producing ethanol accompanied by power generation and Odebrecht will mount a distillery there,” said the businessman.
“It’s a similar project that Odebrechtis developing in Angola,” he added in reference to a joint venture of $ 258 million Angolan oil company Sonangol with to produce some 260,000 tons of sugar, 30 million liters of ethanol and 45 megawatts of power power.
Ethanol production on a large scale in Cuba has met with opposition from former President Fidel Castro, an ardent critic of the use of food crops like corn to make biofuels. Some experts believe that if Cuba could revive its sugar industry to become the third largest producer of biofuels in the world behind the United States and Brazil.
Ron Soligo, an economist at Rice University in Houston who has studied Cuba’s sugar industry, estimates that the island could produce about 7,500 million liters of ethanol annually. “But developing the ethanol industry in Cuba will take a while, since much of the land has been abandoned for years,” he said.
“Due to the centralized nature of the Cuban economy, a large Brazilian company can be the right partner,” he added.
Brazil, the second largest ethanol producer in the world, has provided technical assistance the Cuban authorities for the production of biofuels from sugar cane. “The issue is on the table. There is planned investment in sugar and there is a possibility that at some point this can be extended to the ethanol industry,” said a Brazilian Foreign Ministry source.
Odebrecht’s entry in the modernization of the depressed sugar industry expand its role in the infrastructure of the island. The company is currently one of the leading ethanol producers in Brazil through its subsidiary ETH.
Wednesday, March 7, 2012
Wednesday, January 25, 2012
Business Perspective on Change
Cuba and the slow road to reform
David Roberts
Is Cuba tiptoeing towards an open economy and even a form of genuine democracy?
Reforms enacted over the last year or so by President Raúl Castro have already gone further than many expected, or hoped for, when he took over from his brother Fidel some four years ago.
A degree of private enterprise has been introduced in agriculture and many former public employees performing services such as hairdressing are now effectively self-employed. Mortgage reforms have been introduced, along with subsidies to allow people to build their own homes. Many of the country's political prisoners have been released (a process marred by the recent death of dissident Wilmar Villar after a 50-day hunger strike), and the lifting of travel restrictions on Cubans wishing to go abroad, including the scrapping of the dreaded tarjeta blanca or exit visa, is said to be in the pipeline (although in late December the younger Castro brother poured cold water on hopes that the restrictions would be ended imminently saying it was too early). It's perhaps ironic, therefore, that US travel restrictions on those visiting the Caribbean island, although eased somewhat by Barack Obama, remain in place.
This may all sound rather paltry given the enormous distance the country still needs to go to become a western-style liberal democracy, but nevertheless it does represent some progress and the Cuban authorities need to be encouraged to go further down the reform road and to bring the Cuban people the standard of living they deserve. Figures often cited put the average monthly income in Cuba at US$20 at the official exchange rate. Clearly, this figure is somewhat misleading given the artificial exchange rate and the cost of living, and the CIA's World Factbook puts 2010 GDP per capita, on a purchasing power parity basis, at US$9,900 - higher than many countries in the region including the Dominican Republic and Jamaica, along with almost all of Central America.
In fact, the Cuban figure is very close to Brazil's US$10,800, and almost certainly comes with a much more uniform distribution of wealth than in most countries in Latin America.
None of the above is an attempt to make excuses for the dire economic situation that Cuba is in and has been in for many years, certainly since the demise of the Soviet Union, but it's merely to put things in some sort of perspective. The performance of the Cuban economy also needs to be seen in the context of the five decades-old trade embargo imposed by the US. Clearly the "logic" that in order to lift the embargo Washington needs to see substantial progress towards democracy in Cuba doesn't hold up - if it did there would be similar embargos against a whole slew of countries, including close allies of the US such as Saudi Arabia, the UAE and Bahrain (did someone mention oil?), all of which score worse than Cuba in the Economist Intelligence Unit's 2011 democracy index.
If anything the embargo hinders rather than encourages the process of democratization in Cuba, as the Castros can use the measure to defend their authoritarianism, as well as cite it as a reason (only partly justified) for the island's economic woes.
A full or even partial lifting of the embargo may not be politically feasible in the present electoral climate in Washington, but it is something that whoever wins in November should seriously consider for the wellbeing of ordinary Cuban people and for US relations with the region (the demand to lift the embargo is one of the few things that seems to unite Latin American leaders), not to mention the opportunities it would create for US trade and investment.
http://www.bnamericas.com/opinion_piece.jsp?idioma=I¬icia=1448003
David Roberts
Is Cuba tiptoeing towards an open economy and even a form of genuine democracy?
Reforms enacted over the last year or so by President Raúl Castro have already gone further than many expected, or hoped for, when he took over from his brother Fidel some four years ago.
A degree of private enterprise has been introduced in agriculture and many former public employees performing services such as hairdressing are now effectively self-employed. Mortgage reforms have been introduced, along with subsidies to allow people to build their own homes. Many of the country's political prisoners have been released (a process marred by the recent death of dissident Wilmar Villar after a 50-day hunger strike), and the lifting of travel restrictions on Cubans wishing to go abroad, including the scrapping of the dreaded tarjeta blanca or exit visa, is said to be in the pipeline (although in late December the younger Castro brother poured cold water on hopes that the restrictions would be ended imminently saying it was too early). It's perhaps ironic, therefore, that US travel restrictions on those visiting the Caribbean island, although eased somewhat by Barack Obama, remain in place.
This may all sound rather paltry given the enormous distance the country still needs to go to become a western-style liberal democracy, but nevertheless it does represent some progress and the Cuban authorities need to be encouraged to go further down the reform road and to bring the Cuban people the standard of living they deserve. Figures often cited put the average monthly income in Cuba at US$20 at the official exchange rate. Clearly, this figure is somewhat misleading given the artificial exchange rate and the cost of living, and the CIA's World Factbook puts 2010 GDP per capita, on a purchasing power parity basis, at US$9,900 - higher than many countries in the region including the Dominican Republic and Jamaica, along with almost all of Central America.
In fact, the Cuban figure is very close to Brazil's US$10,800, and almost certainly comes with a much more uniform distribution of wealth than in most countries in Latin America.
None of the above is an attempt to make excuses for the dire economic situation that Cuba is in and has been in for many years, certainly since the demise of the Soviet Union, but it's merely to put things in some sort of perspective. The performance of the Cuban economy also needs to be seen in the context of the five decades-old trade embargo imposed by the US. Clearly the "logic" that in order to lift the embargo Washington needs to see substantial progress towards democracy in Cuba doesn't hold up - if it did there would be similar embargos against a whole slew of countries, including close allies of the US such as Saudi Arabia, the UAE and Bahrain (did someone mention oil?), all of which score worse than Cuba in the Economist Intelligence Unit's 2011 democracy index.
If anything the embargo hinders rather than encourages the process of democratization in Cuba, as the Castros can use the measure to defend their authoritarianism, as well as cite it as a reason (only partly justified) for the island's economic woes.
A full or even partial lifting of the embargo may not be politically feasible in the present electoral climate in Washington, but it is something that whoever wins in November should seriously consider for the wellbeing of ordinary Cuban people and for US relations with the region (the demand to lift the embargo is one of the few things that seems to unite Latin American leaders), not to mention the opportunities it would create for US trade and investment.
http://www.bnamericas.com/opinion_piece.jsp?idioma=I¬icia=1448003
Sunday, January 8, 2012
A more open Cuba, blessed by the Pope
By Nick Miroff
Created 1969-12-31 19:00
HAVANA, Cuba — In January 1998, Pope John Paul II made his landmark trip to Havana, meeting with Fidel Castro and memorably calling on Cuba to “open to the world,” and for “the world to open to Cuba.”
Fourteen years later, Pope Benedict XVI is preparing a second pastoral visit to the island, but the message of his trip is likely to be a different one: urging Cuba to open to itself.
When the 84-year-old Pontiff arrives March 26 for a three-day visit, his presence should bolster those who have been pressing for deeper reforms to the island’s one-party socialist system, especially from within Cuba’s church.
Benedict’s arrival is ostensibly timed to coincide with the 400-year anniversary of the appearance of Cuba’s Virgin of Caridad del Cobre, the island’s patron saint.
But the other purpose of his visit appears to be to extend his political blessings to the emerging role of Cuba’s church as a leading public advocate for greater political and economic freedoms — and to Raul Castro’s government for allowing that to happen.
“The changes are being put into practice by the government, not the church,” said Orlando Marquez, spokesman for the Archdiocese of Havana, in an interview.
“But the Church has been saying that the changes are good, that they are the changes that the people want, and that those changes must continue,” he said.
Benedict will find Cuba struggling with many of the same issues it faced when John Paul II visited in 1998, only without Fidel Castro to host him. At 85, Castro is now retired, rarely seen by the public, and no longer head of Cuba’s all-powerful Communist Party.
Instead the Pope will be received by Raul Castro, 80, who as president has afforded Cuba’s Church a degree of social and political prominence it has not held in a half century.
Though Cuba’s religious believers were once persecuted — even Christmas was frowned upon by authorities — Cuba’s church-state relations have improved markedly, and in recent public speeches, Raul Castro has warned fellow Party members that religious discrimination has no place in contemporary Cuba.
The Church today is the only major independent institution on the island that isn’t under government control, and has even consulted with the government on the scope of economic reforms. Carefully, delicately, and with much success, it navigates a tricky course between communist authorities on the island still wary of its intentions, and Cuban exiles abroad who want church officials to be more confrontational toward the Castro government.
In 2010, after repeated attacks by government-organized mobs against Cuba’s Ladies in White dissident group, church officials intervened to halt the abuse and went on to secure the release of the women’s jailed husbands over the following several months.
By the end of the process, nearly all of Cuba’s internationally-recognized political prisoners were freed — more than 100 in total. Since then, church leaders have been outspoken in supporting economic liberalization measures initiated by Raul Castro, while gently prodding his government to do more.
Cuba is one of only two countries the Pope will visit on the trip, his first to Spanish-speaking Latin America, though he traveled to Brazil in 2007. While Mexico, with nearly 100 million Catholics, is a fairly obvious destination, Cuba is not.
“Cuba is a Catholic country by tradition but it’s not a huge Catholic country compared to Mexico or Brazil,” Marquez said. “And nevertheless, the Holy Father has decided to come and be with Catholic Cubans and the Cuban people in this special moment in our history.”
The Pope will begin his visit in Santiago de Cuba, site of the shrine to the Virgin of Charity, and will celebrate an outdoor Mass in the public square of the island’s second-largest city.
He will then travel to Havana and celebrate Mass in the Plaza of the Revolution, the same place where Fidel Castro gave many of his marathon speeches, and where John Paul II addressed a vast crowd of Cubans in 1998.
With the Obama administration easing travel restrictions for Cuban Americans who want to return to the island, thousands of US residents are expected to make the trip to attend the Pope’s outdoor Masses.
“The Pope’s visit will open paths between the Cuban people and the government, the Church and the government, and among Cubans here and abroad,” said Roberto Veiga, editor of “Lay Space,” one of the Church-backed journals that has become a key forum for debates on political and economic topics, on an island where nearly all forms of media are still controlled by the state.
In advance of the Pope’s visit, Raul Castro announced last month the release of more than 2,900 Cuban inmates from the island’s jails, including several who were considered political prisoners.
But US subcontractor Alan Gross was not among them, and Benedict may also use the visit to privately urge Raul Castro to pardon the 62-year-old jailed American. Gross is serving a 15-year prison term for attempting to set up clandestine satellite internet networks on the island as part of a US-funded democracy program.
US officials and Gross’s lawyers say he was only trying to give better web access for Cuba’s small Jewish community. His imprisonment is now viewed as the biggest sticking point to improvements in US-Cuba relations, and anything the Vatican might do to ease tensions would be viewed as a diplomatic success.
http://www.globalpost.com/dispatch/news/regions/americas/cuba/120106/more-open-cuba-blessed-the-church
Created 1969-12-31 19:00
HAVANA, Cuba — In January 1998, Pope John Paul II made his landmark trip to Havana, meeting with Fidel Castro and memorably calling on Cuba to “open to the world,” and for “the world to open to Cuba.”
Fourteen years later, Pope Benedict XVI is preparing a second pastoral visit to the island, but the message of his trip is likely to be a different one: urging Cuba to open to itself.
When the 84-year-old Pontiff arrives March 26 for a three-day visit, his presence should bolster those who have been pressing for deeper reforms to the island’s one-party socialist system, especially from within Cuba’s church.
Benedict’s arrival is ostensibly timed to coincide with the 400-year anniversary of the appearance of Cuba’s Virgin of Caridad del Cobre, the island’s patron saint.
But the other purpose of his visit appears to be to extend his political blessings to the emerging role of Cuba’s church as a leading public advocate for greater political and economic freedoms — and to Raul Castro’s government for allowing that to happen.
“The changes are being put into practice by the government, not the church,” said Orlando Marquez, spokesman for the Archdiocese of Havana, in an interview.
“But the Church has been saying that the changes are good, that they are the changes that the people want, and that those changes must continue,” he said.
Benedict will find Cuba struggling with many of the same issues it faced when John Paul II visited in 1998, only without Fidel Castro to host him. At 85, Castro is now retired, rarely seen by the public, and no longer head of Cuba’s all-powerful Communist Party.
Instead the Pope will be received by Raul Castro, 80, who as president has afforded Cuba’s Church a degree of social and political prominence it has not held in a half century.
Though Cuba’s religious believers were once persecuted — even Christmas was frowned upon by authorities — Cuba’s church-state relations have improved markedly, and in recent public speeches, Raul Castro has warned fellow Party members that religious discrimination has no place in contemporary Cuba.
The Church today is the only major independent institution on the island that isn’t under government control, and has even consulted with the government on the scope of economic reforms. Carefully, delicately, and with much success, it navigates a tricky course between communist authorities on the island still wary of its intentions, and Cuban exiles abroad who want church officials to be more confrontational toward the Castro government.
In 2010, after repeated attacks by government-organized mobs against Cuba’s Ladies in White dissident group, church officials intervened to halt the abuse and went on to secure the release of the women’s jailed husbands over the following several months.
By the end of the process, nearly all of Cuba’s internationally-recognized political prisoners were freed — more than 100 in total. Since then, church leaders have been outspoken in supporting economic liberalization measures initiated by Raul Castro, while gently prodding his government to do more.
Cuba is one of only two countries the Pope will visit on the trip, his first to Spanish-speaking Latin America, though he traveled to Brazil in 2007. While Mexico, with nearly 100 million Catholics, is a fairly obvious destination, Cuba is not.
“Cuba is a Catholic country by tradition but it’s not a huge Catholic country compared to Mexico or Brazil,” Marquez said. “And nevertheless, the Holy Father has decided to come and be with Catholic Cubans and the Cuban people in this special moment in our history.”
The Pope will begin his visit in Santiago de Cuba, site of the shrine to the Virgin of Charity, and will celebrate an outdoor Mass in the public square of the island’s second-largest city.
He will then travel to Havana and celebrate Mass in the Plaza of the Revolution, the same place where Fidel Castro gave many of his marathon speeches, and where John Paul II addressed a vast crowd of Cubans in 1998.
With the Obama administration easing travel restrictions for Cuban Americans who want to return to the island, thousands of US residents are expected to make the trip to attend the Pope’s outdoor Masses.
“The Pope’s visit will open paths between the Cuban people and the government, the Church and the government, and among Cubans here and abroad,” said Roberto Veiga, editor of “Lay Space,” one of the Church-backed journals that has become a key forum for debates on political and economic topics, on an island where nearly all forms of media are still controlled by the state.
In advance of the Pope’s visit, Raul Castro announced last month the release of more than 2,900 Cuban inmates from the island’s jails, including several who were considered political prisoners.
But US subcontractor Alan Gross was not among them, and Benedict may also use the visit to privately urge Raul Castro to pardon the 62-year-old jailed American. Gross is serving a 15-year prison term for attempting to set up clandestine satellite internet networks on the island as part of a US-funded democracy program.
US officials and Gross’s lawyers say he was only trying to give better web access for Cuba’s small Jewish community. His imprisonment is now viewed as the biggest sticking point to improvements in US-Cuba relations, and anything the Vatican might do to ease tensions would be viewed as a diplomatic success.
http://www.globalpost.com/dispatch/news/regions/americas/cuba/120106/more-open-cuba-blessed-the-church
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)
* 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."
STAGNATING ECONOMY
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)
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."
STAGNATING ECONOMY
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)
Monday, November 28, 2011
Government to Contract to Private Sector
Cuban government to contract with private sector
* New bank rules open door to private contracting
* Measure seen as key to consolidating new private sector
* Could lead to larger businesses
By Marc Frank
HAVANA, Nov 28 (Reuters) - The Cuban government will begin contracting out some services to the private sector next year in a break from the state-dominated past aimed at helping small business develop, government insiders said on Monday.
They said food and cleaning, construction and some transportation services, all of which are currently done by government workers, were among those that would be contracted out in the future as Cuban leaders push ahead with more than 300 reforms to modernize the island's Soviet-style economy.
President Raul Castro is encouraging private sector growth to create jobs for the one million employees he hopes to slash from bloated government payrolls over the next few years. His goal is to strengthen Cuban communism to assure its future.
More than 350,000 people are now self-employed, more than double the number of two years ago, although most are small operations based in homes.
Their ability to grow has been hindered partly by a lack of capital and access to government business, which is significant because the state controls most of the economy.
But new credit and banking regulations that take effect Dec. 20 will allow small businesses for the first time to obtain loans and, along with private farmers, to open commercial accounts, a prerequisite for doing business with the state.
The measures also lift a 100 peso- (roughly $4-) cap on business between state enterprises and private individuals.
"It is very positive for the development of the non-state sector that it now has at its disposal new financial instruments that before were available only to state companies and joint ventures with foreign companies," said a local economist, requesting anonymity due to a ban on talking with foreign journalists.
"It paves the way for business between the new non-state sector and the state."
Cuba expert Phil Peters at the Lexington Institute think tank in Arlington, Virginia, said the measures, in addition to helping the private sector, should make the government more efficient and were indicative of a larger change.
"It is another sign that the socialist state is shedding longstanding prejudice against private enterprise," he said.
* New bank rules open door to private contracting
* Measure seen as key to consolidating new private sector
* Could lead to larger businesses
By Marc Frank
HAVANA, Nov 28 (Reuters) - The Cuban government will begin contracting out some services to the private sector next year in a break from the state-dominated past aimed at helping small business develop, government insiders said on Monday.
They said food and cleaning, construction and some transportation services, all of which are currently done by government workers, were among those that would be contracted out in the future as Cuban leaders push ahead with more than 300 reforms to modernize the island's Soviet-style economy.
President Raul Castro is encouraging private sector growth to create jobs for the one million employees he hopes to slash from bloated government payrolls over the next few years. His goal is to strengthen Cuban communism to assure its future.
More than 350,000 people are now self-employed, more than double the number of two years ago, although most are small operations based in homes.
Their ability to grow has been hindered partly by a lack of capital and access to government business, which is significant because the state controls most of the economy.
But new credit and banking regulations that take effect Dec. 20 will allow small businesses for the first time to obtain loans and, along with private farmers, to open commercial accounts, a prerequisite for doing business with the state.
The measures also lift a 100 peso- (roughly $4-) cap on business between state enterprises and private individuals.
"It is very positive for the development of the non-state sector that it now has at its disposal new financial instruments that before were available only to state companies and joint ventures with foreign companies," said a local economist, requesting anonymity due to a ban on talking with foreign journalists.
"It paves the way for business between the new non-state sector and the state."
Cuba expert Phil Peters at the Lexington Institute think tank in Arlington, Virginia, said the measures, in addition to helping the private sector, should make the government more efficient and were indicative of a larger change.
"It is another sign that the socialist state is shedding longstanding prejudice against private enterprise," he said.
Friday, November 25, 2011
Farm Sales Reformed
Cuba OKs direct farm sales to tourism sector
By: The Associated Press | 11/21/11 12:20 PM
The Cuban government is authorizing farmers to sell their products directly to state-run tourist hotels and restaurants, eliminating the need to go through a government redistributor, authorities said Monday.
The measure also lets buyers and sellers negotiate their own prices, according to the Official Gazette, a government publication that disseminates new laws.
The latest in a series of economic changes pushed by President Raul Castro, it aims to "reduce losses by simplifying the links between primary production and the final consumer," according to the Communist Party newspaper Granma.
Beginning Dec. 1, independent growers, rural co-ops and state-run agribusinesses will be able to sell "agricultural products without industrial processing, rice for consumption and charcoal to hotel and restaurant establishments in the tourism sector," the Gazette said.
Payments will be collected in Cuban pesos, valued at 24 to the U.S. dollar, rather than the convertible currency, currently one-to-one with the greenback.
The measure does not authorize direct sales to the growing ranks of private restaurants and other small businesses that have mushroomed across the island as part of Castro's economic overhaul.
The government also recently legalized the sale of homes and automobiles for the first time since shortly after the 1959 revolution and is planning to slash state payrolls. Last week, the government reported a major reorganization of the sugar industry to eliminate bureaucracy.
Tourism is one of Cuba's top sources of foreign income, bringing in about $2 billion a year.
Read more at the Washington Examiner: http://washingtonexaminer.com/entertainment/travel/2011/11/cuba-oks-direct-farm-sales-tourism-sector#ixzz1ejQSKLhQ
By: The Associated Press | 11/21/11 12:20 PM
The Cuban government is authorizing farmers to sell their products directly to state-run tourist hotels and restaurants, eliminating the need to go through a government redistributor, authorities said Monday.
The measure also lets buyers and sellers negotiate their own prices, according to the Official Gazette, a government publication that disseminates new laws.
The latest in a series of economic changes pushed by President Raul Castro, it aims to "reduce losses by simplifying the links between primary production and the final consumer," according to the Communist Party newspaper Granma.
Beginning Dec. 1, independent growers, rural co-ops and state-run agribusinesses will be able to sell "agricultural products without industrial processing, rice for consumption and charcoal to hotel and restaurant establishments in the tourism sector," the Gazette said.
Payments will be collected in Cuban pesos, valued at 24 to the U.S. dollar, rather than the convertible currency, currently one-to-one with the greenback.
The measure does not authorize direct sales to the growing ranks of private restaurants and other small businesses that have mushroomed across the island as part of Castro's economic overhaul.
The government also recently legalized the sale of homes and automobiles for the first time since shortly after the 1959 revolution and is planning to slash state payrolls. Last week, the government reported a major reorganization of the sugar industry to eliminate bureaucracy.
Tourism is one of Cuba's top sources of foreign income, bringing in about $2 billion a year.
Read more at the Washington Examiner: http://washingtonexaminer.com/entertainment/travel/2011/11/cuba-oks-direct-farm-sales-tourism-sector#ixzz1ejQSKLhQ
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