Cuba banker says state has lent ‘millions’ to more than 13,000 farmers under ag initiative

HAVANA, AP — Cuba says it has extended more than 13,000 farm credits under an agricultural overhaul launched by President Raul Castro.

Ileana Estevez is president of the Banco de Credito y Comercio. She says state banks have lent “millions” at interest rates ranging from 3 percent in the first years to a high of 7 percent.

Cuba began restructuring the agricultural sector in 2008, letting private farmers cultivate fallow state land. The initiative aims to reduce dependence on costly food imports and is part of a wider economic overhaul.

Farmers can work plots as big as 100 acres (40 hectares) in renewable agreements of 10 years for individuals and up to 25 years for cooperatives.

State newspaper Juventud Rebelde published Estevez’s comments Sunday.


Easing rules with Cuba divides farm lawmakers

Washington, D.C. – An effort is under way in Congress again to ease restrictions on trade with Cuba to boost U.S. farm exports, but farm-state lawmakers are split over whether it is a good idea to allow Americans to more freely travel there.

Farm groups argue that easing the embargo and promoting U.S. tourism in Cuba will improve America’s image there and undermine the Castro regime.

U.S. Rep. Steve King, R-Ia., doesn’t buy it. He said at a House Agriculture Committee hearing Thursday that the United States should wait for the “biological solution,” referring to the demise of the Castro brothers.

“I want to wait out this biological solution,” he said.

The committee chairman, Rep. Collin Peterson, D-Minn., has introduced a bill that would lift restrictions on Cuban purchases of U.S. food and end limits on American travel to the island. The embargo means U.S. farmers are losing sales to competitors from Brazil and elsewhere, he said.

He released letters from Human Rights Watch and the U.S. Conference of Catholic Bishops supporting the legislation. Having “more, rather than less, contact” with Cubans will improve their lives, the bishops said.

“We’re just spiting ourselves not to take advantage of this market,” said U.S. Rep. Leonard Boswell, D-Ia., a co-sponsor of the bill. “Dammit, it’s time to do this.”

Farm groups say U.S. food exports to Cuba could double, given Cuban demand for pork, chicken, beans, rice and other commodities. Last year, Cuba bought $528 million in U.S. food.

Previous efforts to ease the embargo have met strong resistance, and Republicans on the House committee are split over whether the restrictions on travel should be changed.

Bob Stallman, president of the American Farm Bureau Federation, said allowing for U.S. tourism in Cuba would encourage Cubans to view the United States more favorably.

A Republican co-sponsor of the bill, Rep. Jerry Moran, said the United States has a double standard toward China and Cuba. He seemed to chide some of his critics back home in Kansas.

“In Kansas, we would not object to selling Boeing aircraft to China, yet we are worrying about selling wheat to Cuba,” he said.

Increasing food sales to Cuba takes money from the Cuban government and puts “it in the pockets of American farmers and agribusiness,” Moran said.

But Republicans such as King are cool at best to the legislation, or at least oppose an easing of travel restrictions. “We have invested a full half a century into waiting out the biological solution in Cuba,” King said.

Rep. Mike Conway, R-Texas, questioned whether the regime can be weakened. “There’s not enough misery in the system for them to rear up against the totalitarian government they are living under.”

Other Republicans said money spent by U.S. tourists in Cuba would wind up with the government, not the people. – Travel to Cuba

Cuba to trim bureaucracy

Cuba’s agriculture ministry will cut thousands of bureaucratic jobs and reorganise its large state-run farms into smaller plots in a bid to reverse steadily declining food output, official media said.

Communist Party newspaper Granma said that 89,000 employees at state farms, or 26% of their work force, are office workers and that the sector suffers from an “excess of unproductive personnel.”

It said at least 10% of those jobs will be eliminated starting in December with the aim of “reducing bosses and functionaries and substituting departments with specialists and technicians on the farms.”

Granma said the sector’s workforce is being reorganized into “worker collectives” of no more than 10 individuals who will be assigned specific plots of land, or fincas, for which they will be responsible.

Their pay will be based on performance, Granma said.

The changes are the latest by President Raul Castro as he wrestles with ways to increase agricultural production and, in turn, reduce food imports that are draining Cuba’s coffers. Cuba imports between 60% and 70% of its food.

Soon after Raul Castro took over the presidency from ailing brother Fidel Castro last year, he decentralized agriculture decision-making, increased prices paid for produce and launched a massive land-lease program to put more land in private hands.

Nevertheless, agricultural production was down 7.4 percent this year through September compared to the same period in 2008. Much of the decline was blamed on damage to banana plantations by hurricanes last year.

Cuba is currently undergoing a financial crisis that has forced drastic reductions in imports and state budgets, and created the need for the latest changes, Granma said.

“The urgency of reducing imports and increasing food production has accelerated solutions to this old problem that creates bureaucracy, increases costs, hampers production, creates disorder and limits worker earnings,” it said.

Pilot programs have shown that bureaucracy can be cut at least in half without difficulties, the newspaper said.

At one state farm in Havana province, it said the number of supervisors was reduced from 91 to 15 and the land divided into 130 fincas, with led to greater diversification of products.

International agriculture analyst Jerry Hagelberg said it remains to be seen if the reorganization will boost food output.

“Time will tell whether this measure will be much more successful than previous failed attempts to raise efficiency, as long as these farms continue to be run by the state, the marketing of farm products remains controlled by the state, and Cuban agriculture does not get the necessary capital and production inputs,” he said.

Cuba had around 250,000 family farms and 1,100 private cooperatives before the land-lease program began, which together produced around 70% of the country’s produce on less than one-third of the land. – Cuba fiesta, bachelor party in Cuba

Cuba slashes tobacco acreage amid flagging demand

HAVANA (Reuters) – Cash-short Cuba is slashing the amount of land devoted to growing its famous tobacco by more than 30 percent as the global recession and worldwide spread of smoking bans bite into sales of the country’s prized cigars.

Demand for Cuba’s cigars fell 3 percent in 2008 and earlier was reported down 15 percent in 2009 because of the recession and the smoking bans adopted in a growing number of places as a public health measure.

Cuba’s National Statistics Office, in a report posted on its web page (, said land to be planted with tobacco for next year’s crop had dropped to 49,000 acres, down from 70,000 acres, which was in turn less than 2008.

It said the coming crop was expected to be 22,500 tons, down from a planned 26,800 tons. The office blamed the drop on “financial restrictions that made it impossible to count on the necessary resources.”

Cuba’s prized cigar brands, including Cohiba, Montecristo, Trinidad and Partagas, dominate the world’s premium market with 70 percent of sales.

That jealously guarded market share excludes the United States, however, where Cuba’s cigars are banned under the 47-year-old U.S. trade embargo against the communist-led island.

A representative of the exclusive distributor of Cuban cigars, Habanos S.A., a joint venture between Cuba and British tobacco giant Imperial Tobacco Group Plc, said the company had no comment on the statistics office report.

Some 200,000 private farmers and their families depend on growing and curing the precious leaf under contract with the government, and tens of thousands of workers earn their living hand rolling the crop into the famous “Habanos” or “Puros” for export.

Tobacco seedlings are currently being readied for planting from November through January, with harvesting of the quick growing leaf beginning 45 days later. After that a year-long process of drying and curing begins.

Cuba’s dozens of cigar rolling factories have operated at well below capacity this year. – Cuba Luxury vacation rental

Cuba Pins Hopes On New Farms Run for Profit

Washington Post:

CEIBA DEL AGUA, Cuba — Faced with the smothering inefficiencies of a state-run economy and unable to feed his people without massive imports of food, Cuban leader Raúl Castro has put his faith in compatriots like Esther Fuentes and his little farm out in the sticks.

Cuba farm distribution

Cuba farm distribution

If Cuba is searching for its New New Man, then Fuentes might be him. The Cuban government, in its most dramatic reform since Castro took over for his ailing older brother Fidel three years ago, is offering private farmers such as Fuentes the use of fallow state lands to grow crops — for a profit.

Capitalism comes to the communist isle? Not quite, but close. Raúl Castro prefers to call it “a new socialist model.” But Fuentes gets to pocket some extra cash.

“The harder you work, the better you do,” said Fuentes, who immediately understood the concept.

Castro’s government says it has lent 1.7 million acres of unused state land in the past year to 82,000 Cubans in an effort to cut imports, which currently make up 60 percent of the country’s food supply.

The United States, which has maintained a diplomatic deep freeze and a punishing economic blockade against the island for almost 50 years, is the island nation’s largest supplier of food and agricultural products, selling it an average of $350 million worth of beans, rice and frozen chickens each year since 2001, when Congress created exceptions to the trade ban.

At a major speech honoring the revolution in July, Castro smacked his hand on the podium and announced: “The land is there, and here are the Cubans! Let’s see if we can get to work or not, if we produce or not, if we keep our word. It is not a question of yelling ‘Fatherland or Death!’ or ‘Down with imperialism!’ or ‘The blockade hurts us!’ The land is there waiting for our sweat.”

In an August speech, Castro said that the Cuban economy, walloped by three hurricanes last year as well as global recession, grew just 0.8 percent in the first half of 2009. The hurricanes decimated crops and caused $10 billion in damage.

Critics of Cuba’s communist-style collectivist agriculture system say that the country should be a virtual Eden, given its rich soil and abundant rain, and should not have to import tons of dried peas from the imperialist aggressor to the north.

After the collapse of the Soviet Union and the loss of subsidies from Moscow and Eastern Europe, Cuba abandoned its huge farms devoted to sugar cane — and that land was quickly taken over by marabu, a tenacious, thorny weed that now covers vast tracts of Cuba the way kudzu blankets the American South.

“If they really wanted to solve their problem, they could solve it in a minute, with the stroke of a pen,” by allowing private ownership and free markets, said José Alvarez, a professor emeritus and authority on Cuban agriculture at the University of Florida.

Although he has stepped out of his brother’s shadow since taking office, Raúl Castro told the Cuban National Assembly in August: “I was elected to defend, maintain and continue perfecting socialism, not destroy it. We are ready to talk about everything, but not to negotiate our political and social system.” Those who hope that Cuba will crumble after “the death of Fidel and all of us,” Castro said, “are doomed to failure.”

Brian Latell, a Cuba expert at the University of Miami and author of “After Fidel,” said: “This farm reform is one of Raúl’s highest priorities. He talks about it constantly. But the steps have been more reluctant, slower, more tentative than many Cubans would probably like.”

The 78-year-old former brigadier general has signaled that the paternalistic Cuban system may include a little more tough love and a bit more free enterprise. The government is in the process of eliminating subsidized beer for weddings, holidays for exemplary workers, hotel rooms for newlyweds and free chocolate cakes for Mother’s Day. In one of the most watched pilot programs, Cuba is beginning to shutter state-run cafeterias and instead give workers 15 pesos, or about 65 cents, to buy lunch from state-run cafes or private food stalls. The average monthly salary in Cuba is about $20.

Out in the countryside, Castro’s farm reform has set the villages buzzing. Chewing on an unlit cigar, Fuentes took a visitor on a tour of his new domain. Last year, he worked nine acres of land, mostly for self-consumption, “plus a little left over to sell.” This year he applied for and was quickly granted another 20 acres. The plot is his to farm for 10 years, and the only requirement is that he plant crops.

Fuentes pointed to his new fields of sweet potatoes, corn, tomatoes, cassava and beans. He’s also growing flowers to sell. Chickens were running around, and trees bore monster avocados. The future looks better.

“This is big change,” he said. “Everyone wants in.”

His adult daughter Marta works for the local farm cooperative, where Fuentes and other private farmers sell their crops. The state still sets the price — but the more the farmers produce, the more they sell. They also try to grow better-quality produce, which fetches a higher price. They are paid in cash, which Fuentes appreciates, and they are not told what to plant.

“Right now, there are shortages of everything,” Fuentes said, “so there is no risk of overproduction.”

Marta Fuentes said the local cooperative now has 44 farms as members, up from 31 a year ago. “And not only are there more farmers, the farms themselves, like ours, are bigger,” she said. There are more fresh fruits and vegetables available in local markets, she said, and a recent report from the Associated Press said that some commodities appear more abundant in Havana these days.

So depressed is the Cuban economy that the government is pushing farmers to use oxen to plow the fields. “Let’s forget about tractors and fuels for this program, even if we had them,” Castro said.

The Fuentes family uses a couple of oxen. “Not having any machinery might seem backward, but in some ways the oxen are better,” Fuentes said. He can borrow a tractor from the cooperative if he needs one. But the fuel costs are prohibitive.

One of the challenges facing private farmers is the lack of credit and investment. They can work their new farms, but they often don’t have enough fertilizer, seed or fuel. There’s not enough electricity to run water pumps, Fuentes said, and no one has pesticides.

“This a big problem,” said Alvarez, the University of Florida professor. “The government gives the farmers some land, which is good, but they don’t give them any inputs. So they tell them, ‘Take your old machete and go and fight the sun and weather and save us.’ ”

“It’s not much extra money, but believe me, every little bit helps us,” said Marta Bobadilla, a retired shop clerk who was given the use of 1.5 acres behind her house on the outskirts of Havana, which she has transformed into an urban garden filled with bananas, okra, sweet potatoes and leafy vegetables to feed her rabbits.

Asked if the cute little white bunnies might be sold as pets, Bobadilla thought that funny. This is Cuba. “These are to eat,” she said. – Villa rental in Havana, Cuba

Economic cuts in Cuba may mean more farmers will replace tractors with oxen

SAN DIEGO, CUBA — In China it’s the year of the ox — and it could be for Cuba, too.

President Raul Castro is promoting the beasts of burden as a way for the economically strapped communist country to ramp up food production while conserving energy.

He recently suggested expanding a pilot program that gives private farmers fallow government land to cultivate — but without the use of gas-guzzling machinery.

“For this program we should forget about tractors and fuel, even if we had enough. The idea is to work basically with oxen,” Castro told parliament Aug. 1. “An increasing number of growers have been doing exactly this with excellent results.”

Cuba’s economy was devastated by three hurricanes last summer, and the global recession has left the government short on cash to cover debts. As a result, it has slashed spending and cut domestic production and foreign imports, causing shortages of such basics as cooking oil, ground beef and toilet paper.

Though the island gets nearly 100,000 free barrels of oil a day from Venezuela, it also has begun a campaign to conserve crude.

The agricultural ministry in late June proposed increasing the use of oxen to save fuel, as Cubans have seen a summer of factories closing and air conditioners at government offices and businesses shutting off to save oil. The ministry said it had more than 265,000 oxen “capable of matching, and in some cases overtaking, machines in labor load and planting.”

In the farming initiative that began last year, about 82,000 applicants have received more than 1.7 million acres so far — or 40 percent of the government’s formerly idle land. The program seems to have slightly increased production of potatoes and tomatoes in season, but the government has provided no official figures.

Shortages in Cuba are not new. And neither are oxen.

Thousands of Cuban farmers have relied on the beasts in the half century since Fidel and Raul Castro and their rebels toppled dictator Fulgencio Batista.

“The ox means so much to us. Without oxen, farming is not farming,” said Omar Andalio, 37, as he carefully coaxed a pair of government-owned beasts through a sugarcane field last week.

For reasons no one can remember, the plumper one is called “Caramel,” even though he’s white, and his caramel-hued field-mate is “Lightweight” — never mind that he’s nearly 1,000 pounds.

Andalio is one of 300 employees who grow cane, low-quality tobacco, sweet potatoes and bananas in San Diego, 95 miles (150 kilometers) west of Havana, with stunning views of limestone mountains in the distance.

The cooperative has 24 oxen and eight tractors — with two of the machines clawing through terrain cooked by a recent drought. Each tractor can do the work of five teams of oxen, Andalio said.

“Work with tractors hasn’t stopped, but it will only go as far as the economy allows,” he added.

Juan Alvarez, a member of a state flower cooperative that supplies nearby funeral homes, tugged at two oxen with names translating to “Foreman” and “Spoiled Brat.” A pair called “Evil Eye” and “Coal-Stoker” stood in the shade nearby, where a sea green-and-red highway billboard read: “Everything for the Revolution. Summer 2009.”

“We use tractors when there are tractors, but there almost never are,” said Alvarez, 59.

Zenaida Leon, acting head of the 10-employee flower cooperative, said the issue is not “oxen ‘yes,’ tractors ‘no.'”

“I am thankful for the revolution,” the 52-year-old said. “But we don’t get boots, tools, irrigation that works.” – Cuba fly & drive

Cuba’s Land Distribution Plan Keeps Farmers Waiting

LAS GUASIMAS, Cuba (AFP)–Idalmis Garcia is on the cutting edge of Cuba’s bid to boost food production and proudly shows off the small plot of land President Raul Castro’s government put her to work on. Now she wants more.

“I asked for as big a piece of land as they could give me, but they gave me 0.95 hectares (two acres), which is not too much, so I applied for more and I’ve been waiting months for an answer,” Garcia, 39, said, standing amid the goats and sheep she tends on her spread at a former military base just south of Havana.

She is one of 78,113 Cubans who have jumped at the chance to cash in on a law that took effect in September 2008 to try to boost homegrown farm output.

More than 60% of cash-strapped Cuba’s arable land, which totals 1.6 million hectares lies fallow, in a country roughly the size of Portugal, or the U.S. state of Virginia.

And the Americas’ only one-party communist regime spends about $2.8 billion a year importing food for its population of more than 11 million and well over a million tourists.

Adding insult to injury, three major hurricanes ravaged Cuba last year leaving $10 billion in damage and seriously harming many crops and farm animals.

While a great deal of abandoned farmland in Cuba is covered with dense tropical scrub brush, Garcia and her family have been making the best of their New Deal.

Farmers work the land but don’t own it outright. The Garcia family have turned a former military barracks on an ex-base into a small home surrounded by corrals.

Official media say the government has handed out 689,697 hectares – 41% of the total Havana plans to distribute, and that 25% is already being farmed.

Garcia’s lot, however, isn’t as easy as many of the 100,000 private farmers whose productivity is higher and who don’t have such tough brush to contend with.

Many of them have family plots that were small enough that they weren’t confiscated by the government after the 1959 revolution.

All of them have their eye on producing for themselves – and bringing any surplus to market in crowded Havana and other cities.

So land which lies a manageable driving distance from Havana is very much in demand, and a cornerstone of Garcia’s strategy.

She says she would like to have had more government help and advice, but most of all wants a green light to buy five cows to produce milk, and to start raising pigs and rabbits.

Just down the road from Garcia, Orlando Venegas, a mechanical engineer who took up farming three years ago, has been waiting seven months for an additional plot he requested to expand his operation.

And he is dismayed that the cooperative he sold his tomato crop to left him in the lurch, never paying him the $600 it owes him.

“That makes a lot of problems for me; I have workers I have to pay, and they don’t care what the reason for the problem is,” Venegas said.

Failure to deliver payments is a chronic problem, the government acknowledges.

And new farmers, in state media in March, aired passionate complaints about the lack of equipment and seeds.

They even have a hard time getting proper clothing and work boots – most of those items are only available in stores that sell goods in hard currency. Cubans earn an average of under $20 a month.

Despite the challenges on the new rural economic frontier, many Cubans are ready to take a chance and are waiting for their land.

Rafael Echevarria, 50, lives with his extended family in a tiny shack, hoping that he’ll get his land, “even if it is just a little bit.” – Swimming pool condo in Cuba

It Is High Time to Open Cuban Market

Delta Farm Press: Prior to the embargo, Cuba was the largest export market for U.S. rice. The U.S. Chamber of Commerce estimates the U.S. embargo of Cuba costs the economy $1.2 billion a year in lost sales and exports. Lifting the payment restrictions will allow farm families to enter a vibrant, growing market in Cuba.

As a lifelong farmer, I’ve spent decades working together with my friends and neighbors on the problems we face throughout the agricultural community. From droughts to farm bills, we know the best way to handle a challenge is to deal with it directly.

That’s how we are — farmers will always “tell it to you straight.” It is time to be straight with President Obama about Cuba. For nearly 50 years, the Cold War, isolationist policies the United States has implemented toward Cuba in an attempt to coerce democracy, has not worked and it’s time for a change.

President Obama recently lifted travel and remittance restrictions for Cuban-American families to Cuba, a welcome change, but still only a first step in reversing a misguided policy that has hampered agricultural trade since 1962.

Our next action must be to lift the payment limits faced by farmers when trading with the Cuban market. While this action would not lift the trade embargo, its value would be immeasurable to not just the Cuban people, but to Mid-South farm families.

Recently, I introduced the Agricultural Export Facilitation Act with Republican Jerry Moran of Kansas. Together, we are building support for this bipartisan, common sense bill that would amend the law to allow for agricultural credit sales to purchasers in Cuba.

In addition, it would greatly expand the necessary business travel allowed to Cuba in connection with agriculture and medicine.

Currently, U.S. farmers are missing out on what would be a major source of revenue for our country. Prior to the embargo, Cuba was the largest export market for U.S. rice.

Limited trade resumed under the Trade Sanctions Reform and Export Enhancement Act of 2000. But when the Treasury Department mandated all payments to be received in advance of shipment, in cash, U.S. rice exports declined from 176,632 metric tons in 2004 to less than 13,000 metric tons in 2008. This restriction and other licensing requirements severely limit sales for rice producers.

The U.S. Chamber of Commerce estimates the U.S. embargo of Cuba costs the economy $1.2 billion a year in lost sales and exports. Lifting the payment restrictions will allow farm families to enter a vibrant, growing market in Cuba — one in which practically every other nation in Europe and the Western Hemisphere participates.

I have had the opportunity to visit Cuba on two separate occasions. On both trips, Cuba’s leaders expressed to me again and again their interest in purchasing products we have in abundance right here in the Mid-South: commodities like rice and poultry. These leaders know we are able to deliver high-quality products to them cheaper and faster.

By switching from European suppliers of food and grain to American sources, Cuba stands to save between 15 to 20 percent of its current import costs, which The New York Times estimates to be approximately one billion dollars.

While some would claim our current policy must be imposed because it is the best way to restore democracy and human rights to the island, I respectfully disagree. Food should never be used as a political tool. It is my steadfast belief striking down trade and travel barriers with Cuba will promote the ideals of personal freedom, representative democracy, and open-market capitalism to Cuba.

Also, easing restrictions will allow us to begin conversations with other nations who are anxious to see us treat Cuba fairly.

Although our country may not be ready to lift the embargo in its entirety, one of the most crucial incremental steps we could make would be to lift the payment limitations U.S. producers face when dealing with the Cuban market. By allowing Cuba to purchase goods on credit, it makes it easier and cheaper to purchase American agricultural products. Easing these outdated trade restrictions is a win-win for both of our countries. – Cuba Bachelor Party in progress