Cuba freezes prices

Cuba freezes prices
published: Wednesday | October 1, 2008

Cuba announced price freezes at all farmers markets on Monday, promising
to punish any vendors charging more for hard-to-find fruits and
vegetables as food reserves dwindle due to the destruction caused by
hurricanes Gustav and Ike.

A decree occupying the entire front pages of state-run newspapers said
prices at agricultural markets will remain fixed at levels set by
regional communist committees, and that supply-and-demand farmers'
markets will have prices revert to pre-hurricane levels "for a group of
basic products".

The Government also warned of a crackdown on those who steal food and
construction materials from work and sell them on the black market, a
common practice in Cuba, which is plagued by shortages from cement to
breakfast cereal. "Any attempt to violate the law or social norms will
be met with a quick and energetic answer," it said.

The move seemed aimed at reassuring Cubans that basic food prices will
not rise even though the storms ravaged 30 per cent of the island's
crops and officials have warned of food shortages that could last six
months.

An informal survey by an AP reporter of farmers' markets in Havana found
prices for basics, such as rice, taro root, black beans, bananas, sweet
potatoes and mangos did not increase after the storms, though state
television says government inspectors have shut down dozens of produce
stands for raising prices as supplies dwindle.

Basic fruits

And while farmers' markets still have most basic fruits and vegetables,
the quantities are smaller than last month.

Nearly all Cubans work for the Government and earn average monthly
salaries of 408 pesos, US$19.50. They get a modest amount of subsidised
food on a monthly ration, and turn to farmers' markets for fruits and
vegetables.

"It's good they are taking these steps. At least they won't raise
prices," said Kenia Gonzalez, a Havana street sweeper who earns 255
pesos, about US$12 monthly. "It's a relief because prices are already
very high and the money isn't enough for anything."

The farmers' markets were set up in 1994 to assuage widespread hunger
following the Soviet Union's collapse. Small producers and cooperatives
sell on a supply-and-demand basis any produce they have left over after
meeting state production quotas. The state and the military's Youth Work
Army also sell items at small neighbourhood markets.

Scepticism

The announcement was met with some scepticism by Cubans already outraged
that private transportation costs have soared since the Government
raised gasolene prices September 8 - the same day Ike tore across the
island.

A litre of regular gas jumped about US 60 cents to US$1.45, making the
price per gallon about US$5.50.

The increase was particularly high considering Cuba gets nearly 100,000
barrels from Venezuela daily on preferential terms.

"Price have already gone up," said Susana Delgado, a 40-year-old office
worker. "They say there will be more punishments, but they have been
saying that for dozens of years and everything stays the same."

Shoppers hunting for rice at a military-run farmers' market at Havana's
Revolution Plaza one recent morning immediately formed a line when a
cart loaded with the grain arrived at one stall.

"They have rice!" exclaimed a young man, springing into line. "There's
none anywhere else."

The stall's vendor, wearing a red T-shirt and a sweat-stained
olive-green soldier's cap, said giving his name to a foreign reporter
could cost him his job.

"They just brought this, you saw it," he said. "Tomorrow, who knows if
there will be rice."

- AP

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