Posted December 31, 2012 by publisher in Cuba Business.
Nick Miroff | Global Post
Havana now has a wholesale produce market. Is it here to stay — or just an apparition?
Cuba has yet to grasp the invisible hand of Adam Smith, but it is giving some space to an invisible market.
Invisible, at least, during the day.
At night, in an empty lot at the edge of Havana’s Mariano district, an extraordinary gathering of freewheeling commerce has been taking place in recent months.
Every evening after sundown, trucks and tractors from all across the island arrive loaded with fresh produce, queuing up for hours just to secure a parking spot. Throwing open their tailgates, farmers and wholesale vendors shout out their wares and cut deals in cash under the faint glow of cellphone screens and lanterns. Young men lugging tomato crates and sacks of yams swarm between the rows of trucks, dodging pushcarts vendors on makeshift tricycle carts piled high with pineapples and cucumbers.
For now, it’s the closest thing Cuba has to the trading floor of the New York Stock Exchange, and a big development in a country where state bureaucrats have tried to set the price for produce for decades.
“What is this place called?” a visiting reporter asked a young vendor.
He shrugged. “I don’t know,” he said. “We call it ‘El Hueco’ [The Hole].”
It wasn’t hard to see why. The lot becomes a muddy mess in the rain, and, on Wednesday and Sunday nights, it’s so clogged with pushcarts that traffic jams form, pulling buyers deeper into the scrum. There are no bathrooms, no garbage cans and no signs, adding to the impression that communist authorities haven’t quite decided whether to let the market flourish or shut it down.
“This is great because we can sell wholesale here. We don’t have to go out in the streets and try to find customers,” said Yulian Castillo, 28, who was offering banana bunches and 100-pound sacks of taro root for 260 pesos — about $12.
Castillo had to sell two-thirds of this year’s taro crop to the state, which only allows farmers to sell their harvest at market rates once they’ve met their production quotas. But Castillo said the government gave him a decent price this year, and he was free to sell the rest here.
“I like farming, but I like this better,” he said, looking out at the swarming market. “I like coming here, doing business, buying and selling. I never get bored doing this, I’m always on the move,” he said.
Cuba has millions of acres of fertile farmland, but it imports some 70 percent of its food, costing the government $1.5 billion last year. Communist authorities’ perpetual struggle to get local farmers to produce more has forced them to concede a great role for private incentive in agriculture, a shift that is only beginning to extend to the rest of the economy.
And while in towns and cities across the country the government has long permitted retail produce markets that function largely on supply-and-demand market principles, there hasn’t been a central wholesale market where growers from all over the island can sell in bulk quantities.
The market is a boon to farmers and fruit-and-vegetable middlemen, who said it allows the wheels of commerce to turn more efficiently by giving them a direct relationship to retail vendors.
One group of farmers at the market last Wednesday had hauled their lemons all the way across the island from Santiago de Cuba — 500 miles away. There were onion growers from central Cuba’s Sancti Spiritus province in rumbling 1950s-era Ford farm trucks, and mongers from Matanzas selling squash at half the price of those at the city’s retail markets.
Alejandro Manzo had driven 200 miles from his farm in the Villa Clara province, his family’s 1957 Chevy Bel Air stuffed with garlic.
In the past, the police would have tried to seize his produce on the highway, he said. “I used to have to sell on the black market,” said Manzo. “But now the state sees us farmers differently. It’s letting us get ahead. There’s nothing illegal about this anymore — it’s just supply and demand.”
Manzo said he makes the trip to the capital every 10 days, selling braided ropes of garlic in 100-head strands for $12 — $3 more than he’d get back home.
Since taking over Cuba’s presidency in 2008, Raul Castro has made agriculture reform one of his signature policy moves, distributing some 3 million acres of under-performing state land to private farmers and cooperatives.
But his government still hasn’t taken basic steps to boost production and eliminate the farming bureaucracy that often ends up making Cuban produce more expensive for consumers. Cuban farmers still can’t buy new tractors or trucks, relying instead upon rusting Soviet machinery and 50-year-old American farm equipment.
While Havana residents say there’s more food than ever in their markets, prices have risen faster than Cubans’ meager pensions and government salaries, leaving many to complain that the state should intervene more, not less.
One reason for the market distortion, economists say, is the growing inequality in Havana between Cubans who work in low-paid government posts and those who have access to hard currency sent by relatives abroad or through jobs in tourism and private business. It’s one of several reasons that liberalization measures like the new wholesale market haven’t yet led to lower prices for Cuban consumers.
“The growth of all the new [private] restaurants and snack bars has also kept demand high,” said University of Havana economist Juan Triana.
As the government has loosened restrictions on private farmers’ ability to hire laborers, rural wages have risen, he said. “Before farmers could pay workers 15 or 20 pesos [80 cents] a day. Now it’s 40 pesos [$1.50].”
With more money to be made in farming, anecdotal evidence also suggests Cuba is slowing the trend of rural-to-urban migration that left farmers complaining of too few young people interested in growing crops.
Abel Ramos, 35, had arrived at the market at dusk, but with the line of trucks stretching down the road, he said he didn’t expect to get a spot in the market until after midnight.
The wait would be worth it, he said. “Three or four years ago, I used to grow tomatoes and they would go bad while I waited for the state to buy them,” said Ramos. “Not anymore. Now I can come here.”
“This is a beautiful thing,” he said.
——————————Havana Journal Comments——————————
A beautiful thing indeed. It’s called freedom. The Cuban government will have to do something to regulate this market to at least control it’s size, then to impose some order with vendor licensing, standard weights and measures etc but I hope they let the market evolve and thrive without over-regulation.
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