Havana Cuba Business Travel Culture and Politics

Havana Cuba News

Cuba Business News

Posted August 17, 2005 by publisher in Business In Cuba

Email this article | Print this article | Search Havana Journal        

Reuters Marc Frank

Mounds of scrap metal, rusting railway cars and abandoned mills pockmark Cuba’s countryside as the island abandons much of traditional sugar plantation economy and culture, leaving residents in limbo.

“Cuba will never live off sugar again. That belongs to the era of slavery,” Cuban President Fidel Castro said earlier this year.

More than a decade after the collapse of Soviet communism and the loss of a subsidized market for its sugar, Cuba is still coping with the effects. It is closing down obsolete sugar mills that cannot compete given today’s low world prices. In 2002 the island nation shut half its sugar refineries and this year decided to close down more.

Sugar was Cuba’s most important export for more than a century, but it has slipped to third place after nickel and tobacco products. It also trails tourism and family remittances from Cubans living in the United States as a source of hard currency.

“You can imagine, when the mill closed people were mad, they were confused, they felt really terrible. It was the heart of the town,” said 55-year-old Justo Corona Marquez, lifetime resident of Jobabo in eastern Las Tunas province.

“You feel sad. After so many years there is no more harvest,” Corona said, as he sat on a park bench in the town’s center contemplating the dismantled Peru sugar mill, now reduced to three smokestacks amid a pile of rusting iron.

Seventy-one of 156 mills closed in 2002 in a restructuring that left as many as 200,000 workers jobless. The government said new industries would arise and 3.1 million acres of land would be shifted from sugar cane to other agricultural uses, an area equal to 62 percent of Cuba’s arable land.

LITTLE DEVELOPMENT

Three years later more mills are closing even as towns wait for new industries to arise and land falls into disuse in a country that imports half its food.

“There is no capital for development and the government has so far refused foreign investor offers to save mills and develop land,” a Cuban agriculture expert said.

Residents in the First of January municipality in Ciego de Avila province fretted they would be next. Their local mill will not operate in the coming harvest for the first time since it opened in 1918.

The Sugar Ministry blamed a two-year drought for this year’s output of 1.3 million tonnes of raw sugar, well below the government’s post-restructuring target of 2 million. It is the lowest harvest since 1908 and compares with 8 million tonnes in 1990.

The First of January mill, with a capacity of 124,000 tonnes, produced just 38,000 tonnes this year, local workers said.

“They told us we operated at a loss and would not mill until there was enough cane, perhaps in 2007,” said Arnaldo, an automation specialist.

“First of January is dying. Many people are looking to move, to find other jobs,” he added.

Foreign and local experts said drought was only part of the problem.

“This year’s performance was blighted not only by drought. It was also the result of long neglect, under-investment, bad management and poor organization,” international sugar industry analyst G.B. Hagelberg said.

Farmers complained only a small portion of sugar lands have been converted to other uses while the remainder is being overrun by brush and weeds.

WORKERS STUDY ON FULL PAY

In the Jobabo park, fronting the dismantled Peru mill, adolescents played ping-pong and dominoes. A barber plied his trade on the sidewalk as pigs were roasted nearby for pork sandwiches. People walked through the mill rubble and across abandoned railroad tracks going about their daily business.

Romana Alvarez Cruz, umbrella shielding her from the burning sun, said she was being paid a full salary for a five-year course in the humanities and hoped to work in culture.

“Here I am and, yes, there is a future, there are lots of projects,” the 34-year-old mother-of-two said, unable to specify what they were beyond chicken and rabbit breeding and planting fruit trees and vegetables.

Corona said the town had settled down since 2002 because the government kept its promise that workers would be retrained on full pay and guaranteed their wages until new jobs were found.

“Here the government leaves no one to their fate. It is doing what it can,” he said.

Some of Jobabo’s 50,000 residents have left for the provincial capital or gone westward toward Havana or north to the United States, a local doctor said, adding that cases of alcoholism and hypertension had increased.

“The problem is this place is becoming just another depressed agricultural village when it was a bustling industrial town. We are treading water, stagnating at full pay,” she said.

Down the road at the still open Colombia mill the pedestrian hustle and bustle and truck and tractor traffic confirmed the doctor’s diagnosis.

“A suitably dimensioned industry will eventually have to be built from the ground up with massive injections of capital, Until then I see only more of the same,” Hagelberg said.

  1. Follow up post #1 added on August 17, 2005 by publisher with 3905 total posts

    What is odd about this story is the irony of the agriculture business in Cuba. This story talks about people on full salary getting paid to do nothing.

    Maybe if Castro had them planting beans, Pedro Alvarez wouldn’t have to buy $17,000,000 worth from Nebraska.

    So, what’ the deal? Why can’t Castro buy $17,000,000 worth of bean seeds, labor and equipment and then reap many times that investment for years to come?

    Makes too much sense to me.



    Cuba consulting services

  2. Follow up post #2 added on August 19, 2005 by GregoryHavana with 196 total posts

    Publisher…
    Unfortunately it is not that easy. Harvesting beans, or any crop for that matter, does not simply imply buying the seeds. You need some sort of fertilizer, pesticide (whether organic or not), and collection and processing infrastructure. Cuba is slowing developing this, but the conversion of closed sugar cane production areas to other uses is a slow and expensive process that Cuba cannot accomplish over-night. I am somewhat familiar with this because I work as a consultant for the Canadian International Development Agency and the United Nations Development Program in Cuba, with many projects being in the area of sustainable agriculture.


Would you like to add more information?


Only members can add more information. Please register or log in

  • Advertise at Havana Journal Inc
Images of Cuba
El Templete
Follow Havana Journal
SUBSCRIBE to our Cuba Watch newsletter
LIKE us on Facebook

FOLLOW us on Twitter

CONNECT with us on Linked In

Section Archive
Havana Journal, Inc. BBB Business Review



Member of the Association for the Study of the Cuban Economy