The New Agrarian Reforms

...in January, 1995, it was available in the free market for between 7 and 10 pesos a pound...

...Undoubtedly, with the opening of the free agricultural markets, the individual farmers of Cuba will continue to be among the wealthiest social group in the country.12 Yet members of the private-sector cooperatives and the UBPCs should also see their incomes rise...

...Throughout the early 1990s, the country experimented with a number of new initiatives to maintain agricultural production levels...

...22 (1992), pp...

...In a second policy reversal, in October, 1994, free agricultural markets were reopened after having been shut down eight years earlier for promoting the growth of a new class of merchants and exacerbating inequality...

...7 Not infrequently, state directives in terms of what the cooperatives should plant undermined their profitability...

...In response to all of these factors, 121 free agricultural markets were opened throughout Cuba on October 1, 1994, with the number growing between then and January to include at least one in every municipality and in most small towns...

...Figueroa, "La Reforma de la Tenencia de la Tierra," table 2. 5. The author has carried out fieldwork in collaboration with the Rural Research Team of the University of Havana in the munici- pality of Majibacoa in the province of Las Tunas, in Santo Domingo in Villa Clara, and in Guines in Havana province...

...Unlike the CPAs, the new cooperatives are directly linked to state agricultural enterprises...

...6 A second issue is whether the cooperatives will have sufficient autonomy to become viable production units...

...In July, 1994, the dollar reached a peak of 120 pesos in the black market...

...domestic and export food production...

...rapidity, in time for the harvest which began in late December, 1993...

...Cuba's experience with the private-sector production cooperatives in the 1980s demonstrated that attempts to exert too much state control, which reduced cooperative autonomy and members' participation in decision-making, usually resulted in membership disaffection and a lowered commitment to the viability of the cooperative...

...Not only will the state be able to supply minimum food supplies, but it will also be able to meet its commitments to social programs through increased fiscal revenues from agricultural sales...

...21, No...

...While farmers have permanent use rights to this farmland, the lands remain national property...

...By February, 1995, 1,440 non-cane UBPCs had been created, holding approximately 3.7 million acres of land and consisting of 126,723 members...

...Under the cooperative plan, former state-farm workers were given the opportunity to form Basic Units of Cooperative Production (UBPCs) by leasing rent-free land from the state...

...This means that the average Cuban in June could spend his or her whole monthly income on either 12 prepared meals or five to six pounds of pork...

...The moves of the Cuban state toward a mixed economy have been taken reluctantly, only after all else failed to produce a turnaround in The agricultural reforms have been a great stabilizing factor, giving Cubans hope that there might be a way out of the economic crisis...

...This means that more Cubans now Ia n r 0 have access to above-the-ration-card foodstuffs and that the privileges of iing of Cubans who receive dollar remittances have been considerably reduced, although not eliminated...

...They only produce 'meeting-itis,' papers, forms, to justify their own existence...

...After acterized remittances from Cubans residing in the United States to those on the island nmer were banned in August, 1994, one would have expected the peso to con- ,f 1994...

...115-149...

...Under the regulations governing the UBPCs, they cannot change their main line of production...

...6 (1992), pp...

...When the markets opened in October, the state enterprises (including the farms run by the military) played a major role in supplying them, hoping to have a significant impact on bringing prices down from their black-market level...

...3. Figueroa, "La Reforma de la Tenencia de la Tierra," tables 3 and 4. 4. In addition, farms run by the military accounted for 3.2%, CPAs 11.2%, and individual peasants and smallholders for 15.1% of the reported 6,676 million hectares of agricultural land...

...But with the explosion in food prices on the black market brought about by the severe shortages of the 1990s, the incentive to sell surplus to the state dramatically declined...

...4 Interviews in three municipalities revealed that the cooperativization of the state farms was received quite favorably by Cuba's state-farm workers, who thought the UBPCs offered them substantial potential benefits...

...9. In addition to generating inequality in consumption and income levels, the free peasant markets were also seen to be hampering Cuba's collectivization drive of that period...

...recruitment of under- and unemployed urban workers for two-year sojourns on state farms...

...cessful, immediately bringing down the price of pork in Havana from its June 1994 black-market level of 75 pesos to 45 pesos per pound...

...If they exceeded their quota, they were awarded a premium for above-plan production...

...They must negotiate their production plans, including the purchase of inputs, with the state enterprise to which they are linked, but any profits they may generate are their own to divide among the membership...

...in January it was readily available in the free market for two to three pesos a pound...

...13REPORT ON CUBA decentralization of decision-making to smaller units of production within In ke the state agricultural enterprises, nor efforts to encourage greater self-pro- with its visioning on the state farms was applied consistently enough to be print( effective, the ( At the same time, under the same adverse conditions, the private-sector lead production cooperatives (Cooperativas de Producci6n Agropecuaria, CPAs) were out-performing the state enteragrici prises...

...7. See Carmen Diana Deere, Mieke Meurs, and Niurka Perez, "Toward a Periodization of the Cuban Collectivization Process: Changing Incentives and Peasant Response," Cuban Studies, Vol...

...The opening of the free agricultural markets has also provided a means for the Cuban leadership to enhance the viability of its collective forms of production...

...The inequality that was being generated between those who had access to dollars, primarily through remittances from relatives in the United States, and those who did not was resulting in tremendous differences in consumption levels...

...2. Victor Figueroa, "La Reforma de la Tenencia de la Tierra en Cuba y Formaci6n de un Nuevo Modelo Mixto de Economia Agraria," mimeo, Universidad Central de las Villas, Grupo de Desarrollo Rural y Cooperativismo, April, 1995, p. 19...

...Prices of several other products, such as rice and beans, continued to fall between January and June, suggesting that the markets 16NACLA REPORT ON THE AMERICAS NACILA REPORT ON THE AMERICAS 16REPORT ON CUBA have triggered a supply-response on the part of farmers...

...3 By the end of 1994, the cane and non-cane UBPCs held 40.6% of Cuba's agricultural land...

...Under these conditions, and in keeping with its socialist principles, the Cuban leadership chose to turn state agricultural enterprises-which combined state ownership, wage labor and centralized management-into self-managed cooperatives...

...State enterprises now farmed only 29.8% of the total...

...Understanding the Cuban Experience," World Development, Vol...

...1 But these various strategies could not overcome the effect of the dramatic shortfall in imported inputs...

...According to Cuban sugar analysts, however, production would have fallen even further had it not been Outside a free agricul for the increased productivity coming from the new cooperatives...

...825-839...

...It is unclear, however, what would happen if some of the cane UBPCs decide that cane production is too unprofitable under current conditions and attempt to switch to more lucrative crops...

...The New Agrarian Reforms 1. These strategies are described in detail in Carmen Diana Deere, Niurka Perez, and Ernel Gonzales, "The View from Below: Cuban Agriculture in the Special Period in Peacetime...

...While not all Cubans have access to the free agricultural market, and while the majority of those who participate make relatively small purchases, it is clear that the opening of the free markets has met the objective of reducing the potentially explosive level of inequality in consumption levels which characterized the summer months of 1994...

...In the short term, it is evident that the reforms have proved a great stabilizing factor, and perhaps given Cubans hope that there might be a way out of the economic crisis...

...and concerted efforts to increase self-provisioning on these farms, including the tolerance of individual parcels for personal consumption...

...It was evident by January that the new markets had resulted in a greater availability of foodstuffs in Havana city and had had a dampening effect on prices...

...After the production of sugar cane, Cuba's critical export, dropped from 7.6 million tons in 1991 to 4.2 million tons in 1993, it was clear that something had to be done...

...5 Foremost in the mind of most members is that they now expect to produce enough foodstuffs and minor livestock to be self-sufficient...

...When the land was managed as a state farm, the cane operations of this complex were generating an annual loss of two-million pesos...

...For example, in June, 1994, rice was selling for 50 pesos a pound in the black market...

...The CPAs do not have any intermediary...

...The CPAs, the UBPCs (of the non-cane sector), state enterprises, and all other individuals and collectives who might have self-sufficiency plots are also allowed to participate, though before the first three can sell in the new markets they must receive a certificate that they have met their delivery quotas to the state...

...It is unclear, however, what the macroeconomic effect of the reform programs in agriculture will be over the medium term...

...The tax rate ranges from 5% of the value of projected gross sales in the city of Havana to 15% in the small, rural markets of the interior...

...The lower tax rate being charged in Havana city has been successful in attracting suppliers from the interior of the country...

...1 0 Interviews conducted in three Havana city markets in January, March, and June, 1995, revealed that the overwhelming number of those participating in the free agricultural market were either small-scale farmers or representatives of farmers from Havana province...

...Among the experiments were large-scale mobilizations of urban volunteers for twoweek stints in the countryside...

...This is a problem...

...Another was to reverse the depreciation of the peso, which it accomplished...

...It was this price explosion that led to the second dramatic reform, the legalization of free agricultural markets...

...The Cuban National Bank has made long-term, low-interest credit available to the UBPCs for the purchase of machinery, for capital investments such as irrigation systems and installations, and where applicable, for the existing investment in perennial crops and livestock...

...If the UBPCs are to be autonomous cooperatives, you cannot have state enterprises in the middle telling them what to do...

...The new cooperative members become collective owners of all plant and equipment that previously belonged to the state farms...

...By 1993, it was coope apparent that only a radical reordering of incentives on state farms, as well as changes in Cuba's private sector, would halt the continuing decline of the agricultural sector...

...In January, the state was selling pork at 38 to 40 pesos a pound while the prevailing market price was 45 pesos...

...In addition, neither the VOL XXIX, No 2 SEPT/OCT 1995 Carmen Diana Deere teaches economics at the University of Massachusetts at Amherst...

...6. Ministerio del Azucar, "Categorizaci6n de las UBPCs y Principales Problemas," mimeo, Havana, February, 1995...

...tinue to depreciate...

...decisive moves towards the decentralization of management on the state farms...

...The hope was that this new form of organization, by stimulating greater worker effort, would bring about a recovery in sugar-cane production, or at least halt the trend of falling yields and declining production...

...The Direction of the country is going to have to think about this...

...Cooperative members themselves, however, are responsible for all decisions regarding their own selfsufficiency efforts on the lands set aside for this purpose...

...Cary Torres and Niurka P6rez, "Mercado agropecuario cubano: proceso de constituci6n," Economia Cubana, Boletin Informativo, No.18, November, 1994...

...14NACLA REPORT ON THE AMERICAS NACIA REPORT ON THE AMERICAS 14REPORT ON CUBA In the meantime, it is clear that the UBPCs have been formed under conditions in which the shortages of petroleum, spare parts, tools and chemicals have made real gains from greater labor effort difficult to achieve...

...Not only had prices skyrocketed, but a growing amount of trade was taking place only in dollars, leading to an ever-faster depreciation of the peso...

...If so, this will be an important element in enabling the Cuban leadership to maintain social cohesion by guaranteeing the maintenance of basic human needs...

...First, the cooperatives have inherited a highly mechanized, large-scale agricultural system heavily dependent on industrial and chemical inputs...

...Just as imporced the tant, through the appreciation of the peso, incentives to work in the state explosive sector have partially been restored...

...If the reforms succeed in significantly increasing agricultural production while encouraging private and collective farmers to meet their quotas, the state's capacity to guarantee a basic bundle of foodstuffs to all at a subsidized price will be enhanced...

...Nonetheless, a recent government report considered only 9% of the cane UBPCs to be performing well nationally, with another 50% performing according to expectations...

...194-234...

...The existence of these thriving businesses raises the question of who the consumers are, and where the money comes from to purchase these meals and other products...

...First, in September, 1993, the government announced that Cuba's huge state-farm sector was to be turned into a network of workers' cooperatives, thus ending the leadership's long-term commitment to state farms as "the highest form of socialist agriculture...

...The free agricultural market has not, however, the su totally eliminated the black market in foodstuffs...

...While the mobilization of thousands of urban workers led to an increase in food production in 1992, this increase could not be sustained...

...Under this system, the CPAs contracted to deliver a given amount of produce to the state at the official price...

...In addition, utilities and transportation are still highly subsidized, and health care and education continue to be provided free of cost...

...9 The Cuban leadership also came to recognize that additional incentives would be needed to make the new UBPCs successful...

...The state pork enterprise was sucit a free market...

...The UBPCs elect their own management team from among their membership...

...Some mixed-cropping cooperatives, for example, have sometimes refused to plant crops which are unprofitable at official prices or which are too labor intensive...

...This largely depends on whether the changes are sufficient to reverse the decline in production levels, particularly those of the all-important sugarexport sector...

...2 (1995), pp...

...Whether the new cooperatives will be able to realize their full potential, however, depends on a number of factors...

...For example, all 23 UBPCs linked to the large Majibacoa Agro-Industrial Complex in the province of Las Tunas generated profits in 1994...

...Preliminary data indicate that under these adverse conditions, the cane UBPCs are performing at higher levels of efficiency than the previous state farms, with many of these generating profits rather than losses...

...One of the objectives of the Cuban government in opening the new agricultural markets was precisely to try to tap into this "monetary overhang...

...8 ral market in Havana...

...While it is still unclear what it will be replaced by, and whether what emerges is more or less productive, it will almost certainly be a more ecologically benign agriculture, as oxen replace heavy tractors and compost substitutes for the use of chemical fertilizers...

...By March the prevailing price had fallen to 40 pesos while the state pork enterprises were asking 35 to 40 pesos...

...One of the differences between the new agricultural markets and the free peasant markets of the 1980s is that participation in the new markets is not limited to peasants and their representatives...

...2 The urgency was due not only to the timing of the cane harvest, but to its importance...

...The latter had been closed down precisely for this reason...

...The appreciation of the peso also equality suggests that the Clinton Adminition levels stration's move to tighten the embargo has largely been unsuccessful...

...This reorganization of production was initially implemented on the state sugar enterprises with impressive eping socialist iples, :uban ership turn state cultural "ises into anaged ratives...

...Yucca, one of Cubans' favorite foodstuffs, had sold for 15 pesos a pound in June...

...The leadership came to VOL XX1X, No 2 SEPTIOT 1995 15 tu VoL XXIX, No 2 SEPTIOCT 1995 15REPORT ON CUBA realize that the current inequality far surpassed that which characterized the period from 1980 to 1986 when Cuba experimented with free peasant markets...

...The state enterprises are out of sync, they are parasites...

...Almost half of the UBPCs had been formed on the state livestock enterprises, with the remaining UBPCs dedicated to mixed cultivation, coffee, citrus and tobacco production...

...One explanation is the high level of savings which many Cubans have accumulated...

...The black market in foodstuffs has been effectively reduced in size, and prices for abovethe-ration-card foodstuffs have fallen to one-tenth their June 1994 levels...

...The minimum wage in Cuba is 91 pesos per month while the average state wage is 180 pesos per month...

...Representatives of the CPAs and UBPCs from the province were also present...

...While inequality will continue to grow with the opening of the free agricultural markets, it should grow at a slower rate than without a free market in foodstuffs for above-plan production...

...This itself is a product of the shortage of consumer goods on which to spend money, and the high degree of state subsidization of the basic foodstuffs made available through the ration card...

...209-234...

...This practice continued, and in June, the prevailing price was 35 pesos a pound...

...Interviews have revealed that production plans are generally negotiated between the UBPCs and the state enterprises with considerable give and take...

...With the opening of the free agricultural markets, the peso had appreciated to the point where the dollar was valued at between 30 to 35 pesos in June of this year...

...8. Personal interview with the provincial president of the National Association of Small Farmers (ANAP), Las Tunas, June 20, 1994...

...Niurka Perez, Cary Torres and the author carried out interviews and collected price data in the markets of Alto Habana, Marianao and Egido (in old Havana) on January 18 and June 10, 1995...

...The remaining 41% were experiencing severe difficulties, with the principal problems being the lack of inputs and spare parts, or insufficient labor to adequately work the assigned land...

...It was hoped that by reopening a free market for above- A tamarind stall plan production, the UBPCs as well as the private-sector production cooperatives and individual farmers would be stimulated to produce more, meeting their production plans as well as realizing higher incomes and financial solvency through free-market sales...

...Moreover, the prevailing price of in consu m this full meal dropped from 30 pesos in October, 1994, to 25 pesos in January, which cha 1995, and to 15 pesos in June...

...Another difference is that an effective system of taxation has been designed which should allow the state to benefit directly from the volume of market activity...

...As long as state enterprises continue to exist, the UBPCs are not going to be successful," one official confided to me...

...Journal of Peasant Studies, Vol...

...This differential is due to the government's objective of channeling the greatest volume of foodstuffs to the capital, where the food shortages are potentially the most politically volatile...

...In many cases, they were maintaining or even increasing their deliv- enterpr eries to the state, while moving self-m toward their own near total self-sufficiency in foodstuffs...

...In addition, most have the expectation that their cooperatives will be profitable, and that their incomes will eventually reach a level approximating those of production-cooperative members in the private sector...

...In the late 1980s, this system provided incentives for the CPAs and individual farmers to produce above the plan and to sell this surplus to the state...

...The opera O ne interesting feature of the free m Havana markets is the large number of people selling pre- has redt pared foodstuffs, ranging from sweets, soups and drinks, to full meals pack- potentially aged in a paper box made up of pork steak, mixed rice and beans, yucca, and level of i salad...

...She is past president of the Latin American Studies Association (LASA) and a member of the NACLA editorial board...

...These range from smallholders from the province of Pinar del Rio who raise pigs for the Havana markets, to farmers belonging to credit-and-service cooperatives in the provinces of Sancti Spiritus and Holguin who bring produce to the capital on a monthly basis...

...In most cases, the management of these enterprises feels responsible for the performance of the cooperatives and does not hesitate to intervene...

...In the sugar sector, production fell from 4.2 million tons in 1993 to 4.0 in 1994 and to an estimated 3.3 in 1995...

...For a full analysis of this experiment, see Carmen Diana Deere and Mieke Meurs, "Markets, Markets Everywhere...

...By June, 1994, the black market in foodstuffs was totally out of hand...

...The markets were surveyed by Perez, Torres and Carollee Bengelsdorf on March 30, 1995...

...Even under the best of conditions, this system was not very cost-effective, but with supplies of petroleum and other inputs more than halved, the system no longer has any viability whatsoever...

...Instead, confidence in the Cuban peso has been restored, both by the opening of the free agricultural markets, and through the ingenuity of Cuban Americans in finding alternatives ways (through Mexico, Venezuela and Canada) to send remittances to their relatives...

...2 (1994), pp...

...At the same time, many non-cane state enterprises began experimenting with the new system...

...Workers make their own decisions about when and how to plant, though what they plant as their principal crop is negotiated with the state enterprise with which the UBPC is associated...

...See Carmen Diana Deere, Ernel Gonzdles, Niurka Perez and Gustavo Rodriguez, "Household Incomes in Cuban Agriculture: A Comparison of the State, Cooperative and Peasant Sectors," Development and Change, Vol...

...The state presence had diminished considerably, being confined primarily to pork sales, although each market had at least one stand of produce supplied by a state enterprise...

...In their first year of operation, the UBPCs were regulated by the same rules as those governing the private sector...

...The members of the UBPCs are the owners of what they produce...

...Between January and March, most prices continued to drop, partially reflecting the fact that the winter months represent the key growing season for vegetables and root crops, but also-in the case of porkreflecting the determined effort of state enterprises...

...Between September and December of that year, 1,576 sugar-cane UBPCs were formed, consisting of 146,524 workers and encompassing 87% of the land previously held by the state sugar agro-industrial complexes...

...While most of the ingredi- months ents in the prepared meals could be bought in the free markets, some of the processed items contain ingredients such as sugar, which are not legally available for sale...