Cuba, facing drop in food production, pays farmers and raises prices for milk and meat

Cuba, facing drop in food production, pays farmers and raises prices for
milk and meat

The Associated Press
Saturday, June 30, 2007

HAVANA: Cuba is repaying debts to farmers and promising higher prices
for milk and meat in an attempt to increase flagging food production in
a communist society that depends on the state for most of what it eats.

It's trying to head off a crisis in its food system: Production dropped
7 percent last year, imports are becoming more expensive and consumers
complain their tiny government salaries don't allow them to buy more
than a few items a month at supply-and-demand farmers markets.

Finance and Prices Minister Georgina Barreiro said Friday that the state
had paid off 550 million pesos ($23 million; €17 million) in debts to
the small farmers and cooperatives that grow two-thirds of the island's
fruits and vegetables, and renegotiated debts worth 863 million pesos
(US$35 million; €26 million).

"These debts never should have accumulated," Barreiro told a National
Assembly session headed by Acting President Raul Castro.

Food production is a highly sensitive issue in Cuba, where shortages of
everything from meat to potatoes were common after the collapse of the
Soviet Union and its generous subsidies. Food is more plentiful today,
but Cubans still complain that most of the vegetables and fruits sold by
private producers are too expensive.

Cuban officials have been unusually candid about the problem in recent
weeks, with Vice President Carlos Lage complaining to municipal leaders
that food "production is insufficient and commercialization is deficient."

The government in recent weeks has instituted a new billing and payment
system in which banks must pay producers immediately. Lawmaker Orlando
Lugo, president of the National Association of Small Farmers, said more
than half of Cuba's 3,500 cooperatives are using the new system or are
about to start.

"The producers are in much better spirits," he said at Friday's session.

Meanwhile, the ministries of agriculture and sugar, along with
provincial and municipal leaders, have been ordered to create tracking
systems to make sure payments to the small farmers and cooperatives
don't fall behind again.

And parliament on Friday agreed to pay producers 2 1/2 times more for
milk and meat included in the island's heavily subsidized ration program
and in meals provided at similarly low-cost workplace cafeterias,
schools, hospitals and community centers. The prices consumers pay will
remain the same.

The cooperatives and small farming enterprises were created in 1993 when
the government restructured its centralized food system, breaking up big
state farms into smaller units owned and managed by workers. Smaller
parcels went to individual farmers.

Less than 15 years later, more than 150,000 individual farmers and
agriculture cooperatives now produce two-thirds of the country's food
using just a third of the island's workable land. State farms work the rest.

After meeting state quotas, the farmers can sell the rest of their goods
at farmers markets. Cuba has more than 300 markets, including about 50
in Havana.

But Cuba is a long way from becoming self-sustaining. The country spends
US$1.6 billion (€1.2 billion) a year importing food, about a third of it
from the U.S. Even 82 percent of the food sold at subsidized prices on
the ration system is imported.

http://www.iht.com/articles/ap/2007/06/30/news/CB-GEN-Feeding-Cuba.php