Prices in Cuba’s Produce Markets

Prices in Cuba's Produce Markets
May 4, 2014
Finding a way for farmers to earn more and consumers to pay less.
Fernando Ravsberg*

HAVANA TIMES — Last week I went to the "El Trigal" wholesale market and
returned home laden with food and amazement. Prices of the farm products
are incredibly cheaper than the retail produce markets where most Cubans
do their shopping.

A large bunch of bananas goes for 25 pesos (1 USD), a large sack of bell
peppers 130 pesos, and I paid 150 pesos for a packed box of premium
tomatoes. This is less than a third of what they cost at the stands of
the retail produce markets.

"El Trigal" is located within the city of Havana, however, by the time
the farm products reach the retail produce markets the prices have
tripled virtually accross the board at all stands.

That's to say, the vender sells it to the public earning twice what the
farmer and transporter earn together, even though it is they who produce
the food and move it from the countryside, sometimes even from other
provinces.

Supply and Demand Prices?

Today it isn't the supply of producers and consumer demand that
determines the prices of farm produce, but instead the speculation of
vendors. Isn't it in these types of cases where the state should have to
intervene?

The market economy should not be blamed for the way the produce markets
function because they are just one example that highlights the worst of
its features: a trafficking of food where workers and consumer are
equally exploited.

It is true that anyone can buy at the "El Trigal" wholesale market, but
it is a half-truth, since the only way to get there is by car and you
need to buy products in bulk, by sacks and boxes.

Cuban independence war General Maximo Gomez [a Dominican himself] said
that Cubans always fall short or go too far. Today the state exercises
strict control over some aspects of the economy while leaving the prices
of transport and food to the market.

The pendulum does not have to go from one extreme to the other, there
are experiences in the world of strong states successfully guiding far
more complex economies. And in Cuba there is no shortage of economists
who are aware of these examples.

The opening of spaces to the market is a must but clear rules for
commercial activity are needed to prevent speculation and usury,
especially anything having to do with basic food products.

They could start by setting an example in the state's hard currency
stores by putting a brake on the price increases of staple foods and
instead applying hikes on less essential products, such as rum, beer or
tobacco products.

It also would be a good idea to intervene in some way at the retail
produce markets to cut down on speculation, establishing fair prices for
the farmers and affordable to consumers, along with a reasonable profit
to the distributors and vendors.

In California they have opted to bring producers closer to consumers,
using a system of street fairs that avoid the usual commercial chains.
In doing so, an act of magic occurs, farmers earn more and consumers pay
less.
—–
(*) Visit Fernando Ravsberg's blog.

Source: Prices in Cuba's Produce Markets - Havana Times.org -
http://www.havanatimes.org/?p=103423