Cuba rolls out master plan for food production and distribution

Cuba rolls out master plan for food production and distribution
BY MARC FRANK
HAVANA Fri Nov 8, 2013 10:43am EST

(Reuters) - Cuba rolled out a master plan this week to reform food
production and sales that definitively ends the state's monopoly on
distribution and replaces many rules that hamper farmers and consumers.

A decree, which puts the management of most food distribution in
non-state hands, will be applied on an experimental basis in Havana and
the adjoining provinces of Artemisa and Mayabeque before going
nationwide beginning in 2015.

With the country importing around 60 percent of its food and private
farmers outperforming state farms on a fraction of the land, authorities
are gradually deregulating the sector and leasing fallow land to
would-be farmers.

It is slow going, with farm output up just a few percentage points since
President Raul Castro, who replaced his ailing brother Fidel in 2008,
began agricultural reforms as part of a broader effort to "modernize"
the Soviet-style economy.

Many aspects of the new law bring together reforms already in place or
activities that have spontaneously developed and been tolerated by
authorities even if technically illegal, including the renting and
selling of trucks to farmers and allowing them to contract private
hauling of crops instead of relying on the state.

The decree allows farmers, cooperatives and state farms to sell produce
in any quantity and to anyone they please after meeting state contracts,
instead of being mired in regulations as to how much they can sell, to
whom and how.

Large consumers, including state entities and private eateries, can
purchase produce wholesale from private farms and cooperatives, instead
of just the state.

According to the law, published in the official Gazeta on Wednesday,
state-run wholesale markets will be leased to cooperatives and most
state retail markets will be leased to farm and non-farm cooperatives
and licenses issued to individuals to sell produce.

BOON TO PRIVATE SECTOR

The new system still sets prices for a few basics such as rice and
beans, prioritizes state contracts (54 percent of output last year) and
prohibits the sale of a few export crops such as tobacco and coffee, but
by and large represents a big step toward allowing market forces to
govern production and prices.

"This very important initiative fulfills the government's commitment to
facilitating wholesale markets for fruits and vegetables as the private
sector has petitioned," said Richard Feinberg, whose new study, "Soft
Landing in Cuba? Emerging Entrepreneurs and Middle Classes," was
released this week by the Washington, D.C.-based Brookings Institution.

"Remarkably, it provides space for private businesses to both produce
and market foodstuffs in wholesale quantities, in open and healthy
competition with the state," he said.

Cuban farmers and consumers have long complained that the state's
monopoly on food sales is a disincentive to production, inefficient and
leads to waste and poor quality produce.

"Many times we do not produce all that we can for fear we will have
nowhere to sell it," said farmer Diogenes Telles, in a phone interview
from central Camaguey province.

"Now nothing will rot in the fields because the state doesn't pick it
up. If we have the security that all we produce we can sell, of course
we are going to produce more," he said.

Cuban economists and farmers have argued for years that the state should
get out of assigning farm supplies and equipment to farmers in exchange
for contracted food and let those who till the land purchase what they
need based on their success and thus purchasing power, something not
addressed in the law.

Roberto Perez Perez, the member of the Communist Party reform commission
in charge of agriculture, told the state-run media this week that a
pilot project to sell supplies to farmers was already underway in the
special municipality of the Isla de la Juventud.

"With the measures that are being taken and those that will be
implemented we will have an agricultural sector closer to what we need,"
the official media quoted him has stating.

(Editing by David Adams and Jackie Frank)

Source: "Cuba rolls out master plan for food production and distribution
| Reuters" -
http://www.reuters.com/article/2013/11/08/us-cuba-food-reform-idUSBRE9A70QC20131108