Cuban farmers in 'agony' waiting for promised reforms

Cuban farmers in 'agony' waiting for promised reforms
ARTEMISA, CUBA | BY MARC FRANK

In Cuban farm country - between sugar cane, vegetable patches and
overgrown fallow land a world away from Havana's tourist-filled streets
- producers are seething at what they say is the government's
backsliding on promised market reforms to make their lives better.

"It is still agony to farm," said 36-year-old Martin, whose attempts to
grow more vegetables near Artemisa in western Cuba have been thwarted by
the government's monopoly on distributing fuel, fertilizer and seeds,
which are often in short supply.

Already covered with sweat and mud at 9 a.m., Martin swept his hand
towards his crop of cabbage and chard and said he spent 8,000 pesos
($330) on seed in the black market but that price controls reinstated
since January to tackle inflation mean he will make a loss.

Some of his fields are bare because the government did not give him the
seed and other inputs he needed. "I didn't have the money to buy them on
the street."

Irritation over the pace of market-style reforms to one of world's last
Soviet-style command economies mean these issues will be high on the
agenda when the Cuban Communist Party convenes its 7th congress on Saturday.

It wasn't supposed to be like this. At its last congress in 2011, the
party vowed to implement market measures to free up more private
enterprise and boost economic growth by 2015.

The government leased fallow fields to farmers and promised to let them
buy pesticides, fertilizers and other supplies at wholesale markets
instead of waiting for the government to assign them products. It began
to allow farmers to distribute produce directly to vendors and consumers.

Enough was done elsewhere in the economy to allow some small businesses
to blossom and create a nascent middle class. Along with Internet access
and more freedom to travel, a detente with the United States and a
related surge in tourism, it has given some Cubans greater opportunities
and hopes for more.

But only a fifth of the reforms planned in 2011 have been fully
implemented, according to the Communist Party's own newspaper, Granma.
Wholesale markets have not yet materialized, making it hard for farmers
to keep up with rising demand from the new middle class and private
sector restaurants.

Consecutive droughts added to their woes.

Food prices rose so in January the government balked and took a step
back, shutting down some private street vendors and buying, distributing
and selling more food in its own fixed price markets, a model that in
the past stifled production.

Uncultivated farmland still dots the countryside and Cuba imports 60
percent of its food needs, at an annual cost of $2 billion of scarce
currency reserves.

Cuba's rural problems played a role in holding back economic growth to
an average of 3 percent since 2011, below the goal of 5 percent. Despite
booming tourism, the forecast is for 2 percent in 2016.

Martin, leaning against an old rusting tractor, said that for farmers
the reforms have been "a farce."

"They say we can't do as we please with our produce because there is not
enough food. Why is there not enough? Because there is nothing to work
with! No fuel, no fertilizer, no pesticide, no nothing," he said,
visibly annoyed. He asked that his last name not be used.

The government's decision to reassert control over food distribution has
led to tomatoes and bananas rotting in the fields in the province of
Artemisa, two farmers said, because government trucks do not arrive on
time to collect harvests.

Such problems bode poorly for foreign companies looking to find a new
market in Cuba as the United States relaxes its investment restrictions.

WHOLESALE HEADACHES

The four-day congress starting on Saturday will signal whether President
Raul Castro's government recommits to its reforms or whether
conservatives who want to slow the move away from socialist economics
gain more ground.

Castro has in the past scolded mid-ranking officials and party cadres
for resisting change, but the spike in prices and rising inequality gave
traditionalists ammunition in their fight to slow things down.

Plans to transform thousands of small and medium-sized state businesses
into cooperatives have run into a wall of bureaucratic tangles and stalling.

A mid-level public administrator in Havana said only 25 of 120 state-run
eateries in the city that were supposed to become cooperatives have made
the switch.

"They need to take credible action to move forward more quickly. In
politics there is a clock ticking, one of economic expectations,
especially since December 2014 when normalization with the United States
began," said Raul Hernandez, editor of Temas, a reform-oriented magazine.

Cubans rely heavily on creativity to find transport, afford and purchase
basics like toilet paper and detergent, or parts for their bicycles,
motorcycles and cars.

Many are hopeful that measures such as unifying Cuba's dual currencies
will finally be implemented after the congress.

For now, farmers and small businesses - like the restaurant visited by
U.S. President Barack Obama in Havana last month - have to purchase
supplies at retail prices, raising their costs. Others turn to the black
market.

In a move to quell the griping, the government on Tuesday unveiled a
plan to allow some cooperatives and small businesses, including
restaurants, to buy supplies from producers and wholesalers. The
measures do not include any private businesses not formerly in state hands.

The reticence to unleash private sector demand in part reflects Cuba's
weak public finances because the government has a monopoly on foreign
trade so must bear the cost of imports.

Cuba has improved its financial credibility over the last five years,
running trade and current account surpluses and restructuring $50
billion in mainly old debt.

But weak global commodity prices have hit income from the sale of
professional services to allied oil producing nations such as Venezuela,
making it harder for Cuba to buy imports such as the farm products
Martin would like to buy wholesale.

Snack shop owner Juan Perez said he benefited from reforms that allow
him to run a business, but that the high cost of ingredients mean he and
his wife and two grown children net a total of only around $150 a month.

At a junction in Guanajay, a town in Artemisa province, he offers a
small menu of juice, coffee, rolls with ham and mayonnaise, and pudding.

"We used to do a good business selling pizza. But we had to go to Havana
in search of tomato sauce, flour and cheese when we got word it had
appeared on the shelves. Many times it was gone when we arrived. We gave
up," he said.

(Additional reporting by Nelson Acosta; Editing by Kieran Murray)

Source: Cuban farmers in 'agony' waiting for promised reforms | Reuters
- http://www.reuters.com/article/us-cuba-congress-reforms-idUSKCN0XB16Z