Cuba’s food shortages

20100325 at 1934 in Economy, Fidel Castro, Food crisis, Government, Havana, Market, Nomenklatura, Raul Castro by AFM3

Today’s The Economist addressees the Cuban government’s failed agricultural reform:

TWO years ago last month Raúl Castro formally took over as Cuba’s president from his convalescent elder brother, Fidel. The switch raised hopes of reforms, especially of the communist country’s long dysfunctional agriculture. But change has been glacial. Official figures show that in the first two months of this year deliveries to the capital’s food markets were a third less than forecast. Nobody starves, but hard-currency supermarkets go for weeks without basics such as milk and bread.

What has gone wrong? Cuba’s state-owned farms are massively inefficient, and rarely provide more than 20% of the country’s food needs. Three hurricanes in 2008 made matters worse. Raúl Castro has acknowledged the problem, and introduced some changes. Idle state land has been leased to private farmers. The government has raised the guaranteed prices it pays for produce. Farmers can now legally buy their own basic equipment such as shovels and boots, without having to wait for government handouts.

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But Raúl continues to move very cautiously. So Cuba will buy much of its food from foreign suppliers. Foreign exchange, never abundant—partly because of the American economic embargo—is again in short supply. The world recession cut Cuba’s earnings from nickel and tourism last year. Imports fell last year by almost 40%.

A foreign businessman in Havana says there have been signs of a further squeeze this year. Transfers abroad by foreign businesses have been blocked, or delayed, for months. The Spanish owner of Vima, a food importer which supplied many hotels and state-run restaurants, made the mistake of publicly criticising delays in getting paid. His contracts were promptly revoked. Foreign companies have been warned that the government may stop selling them staples, such as meat and rice, for their staff canteens. “They told us bluntly that their priority is feeding the general population, that the situation is very serious, and that we should make our own arrangements,” says a manager of one joint-venture.