Cuba’s agricultural sector, like the rest of the country, resembles an Ajiaco – a famous Cuban soup made of a smorgasbord of ingredients on hand – and this Ajiaco has picked up some interesting flavors over the years.
Throughout its history, especially since independence in 1959, Cuba has made due with what’s been available. There has been feast and there has been famine. One of the most interesting things about Cuban agriculture is that, since the early 1990s, most of the food produced on the island has been grown organically or with minimal chemical input, largely due to limited access to agrochemicals.
As the country develops, economic freedom increases and relations with the global economy expand, what will be added to the soup? Will Cuba nourish its organic roots or will corporate agricultural interests and the desire for rapid development manipulate the sector to revert to conventional agricultural practices?
In the 1980s and early ‘90s, Cuba, fueled by Soviet petrol imports, agrochemicals, and farm equipment, was the third largest exporter of sugar in the world, producing 8.4 million tons in 1990. After the Soviet Union collapsed in the early ‘90s, Cuba entered what is known on the island as “la Perioda Especial” (the Special Period).
In the words of Jorge Salazar-Carillo, a former director of the Economic Group at the Ministry of Finance after the 1959 revolution, “Cuban subsidies, ending in 1990/’92 would have been about 20 billion a year… This meant the collapse of the Cuban agriculture system – the contraction of over 50 percent of agricultural production.”
Cubans had to eat what was available on the island. A friend of mine in Havana told me he ate cabbage soup for months and tried to catch fish off of the Malecón – Havana’s wall to the sea.
As the saying goes, “Scarcity is the mother of invention,” and Cuba was forced to grow what it could to feed its people. As a consequence, the agricultural sector went from being pumped with agrochemicals to organic inputs. After seven years of extreme scarcity, the industry blossomed, and between 1996 and 2005 food production increased by 4.2 percent per capita, the most substantial growth relative to neighboring countries at the time.
The system itself changed as well. Small, cooperative urban farms, rural farmers and cooperatives took the place of larger government-owned conventional farms. As Bill Messina, an agricultural economist at the University of Florida, puts it, “Cuba’s agricultural sector [has] learned to do quite impressive work with close to no resources.”
The strides in organic agriculture are largely due to lack of agrochemicals or the means to purchase them. With the resumption of diplomatic relations under the Obama administration and a relaxation of some trade sanctions, what will happen to Cuba’s agriculture sector?
The Embargo and Trade With the U.S.
Agricultural trade between the U.S. and Cuba has actually been legal for over a decade. Back in 2000, the Trade Sanctions and Export Enhancement Act (TSRA) relieved 40 years of agricultural export restrictions between the U.S. and Cuba. “From that point on, U.S. companies were again permitted to export food products and agricultural commodities,” recounts John Kavulich, president of the U.S.-Cuba Trade and Economic Council. “At first, the Cuban government said ‘no,’ then they said yes after a hurricane in October of 2001. They have purchased about 5.3 billion dollars of products in the last 15 years.”
“The Cuban government has a lock on agricultural inputs, an absolute monopoly, as best we can tell,” says Mr. Messina, “and they have chosen not to import much in the way of fertilizer, pesticides or insecticides.” They have however been open to importing foods like soybean oil, chicken legs and corn from corporate agro-monsters like Koch Foods.
“Normalization would benefit American corporations, not the Cuban citizens,” says economics professor Arch Ritter of the Carleton University in Ottawa.
U.S. food and agriculture companies seem to have the same idea and hold high expectations for the financial benefits of trade liberalization. In 2002, shortly after TSRA was implemented, agricultural giant Archer Daniels Midland Company and others sponsored the U.S. Food & Agribusiness Exhibition, which attracted over 900 corporate representatives and nearly 300 exhibitors. The exhibition brought the most U.S. companies to the island since the revolution. However, these companies are primarily interested in profits, not sustainable and equitable development of Cuba’s agricultural system.
Eric Holt-Gimenez, director of Food First, an organization that leads agricultural tours in Cuba, says, “There are only about 11 million people in Cuba and the people are poor… Agro industrial interests in the United States salivating over this market are gonna come up short in terms of how much they can actually sell.”
In 2007, agricultural and food exports from the U.S. peaked at roughly $710 million. In 2015, that number fell to about $170 million. According to Kavulich, “Cuba is constrained by its own economy that continues to suffer from the inefficiencies of its selected and commercial and economic policy.” Additionally, the embargo still exists, the economy is uncertain and access to foreign direct investment is limited.
The Cash Calamity
Cuba’s biggest hurtle to climb on the mountain of development is arguably a lack of access to credit. Under TSRA, U.S. organizations can sell agricultural products to Cuba; however, all purchases must be in cash. This problem significantly impacts not only Cuba’s agricultural sector but also the country as a whole.
“Cuba is the only country that does not belong to the World Bank or the IMF,” says Jose Gabilondo, international trade lawyer and law professor at Florida International University. “Those institutions were set up to help countries develop…[and] they don’t have access to those sources of capital.
“The good news is that banks can now provide accounts for Cubans on the island,” explains Gabilondo regarding recent developments implemented by the Obama Administration. “The bad news is that banks are so risk averse that no one wants to be the first to do it.” Gabilondo said that, to his knowledge, only the Florida-based Stone Gate Bank is offering Cubans accounts. This recent change does not apply to U.S. agricultural commodity exporters, only to Cuban individuals.
Financing from other countries is available but limited. For example, in 2015, the state-run South Korea Trade Insurance Corporation extended a $67.9 million line of credit to stimulate Korean exports to Cuba and Vietnam that allows Cuba to purchase rice on two-year financing terms. However, as professor Ritter comments, “other countries have not invested in Cuban agriculture in a significant way.”
Imports, Land and Labor
Despite advancements in organic agriculture, Cuba imports an estimated 70 percent of food consumed on the island (the numbers differ depending on who you are speaking with), and roughly 20 percent of that comes from the U.S. Since 2009, support from Venezuela has wavered, tourists are flocking to the island and rural farmers are moving towards cities to participate in the tourist economy. The question remains: How will Cuba feed its people and visitors and will the unique organic production methods weather the storm of change?
Some of Cuba’s agro-products are produced in organic urban cooperative farms called organopónicos, or urban gardens. I had the fortune to spend some time at Vivero Alamar, an organopónico several miles outside of Havana. Out of the rich red soil of this urban Eden grows thick leaves of green spinach, tomatoes so supple they could burst open with fresh salsa, squashes curved and rippled to perfection, mangoes dripping with sweet nectar. Vivero Alamar is blooming with sustainably-grown organic produce. In fact, the only supplement brought onto the 10.8-hectare farm is some cow manure used in the compost.
Organopónicos like this are the poster children of Cuba’s organic agricultural system. However, the rest of the sector is not as strict in its adherence to organic inputs. As Bill Messina says, “If they [farmers] can get their hands on synthetic fertilizer, pesticides or herbicides, some farmers are going to use them.” In 2011, the company Juan Rodriguez Gomez announced production of 100,000 liters of herbicide glyphosate – though synthetic agro inputs are not widely used on the island.
“Sustainable agriculture had its moment in the sun when it saved Cuba from starvation but that was 10 years ago. There is a struggle within Cuba over different models of agricultural development and which can best insure Cuban food sovereignty… It’s a big argument in Cuba right now,” comments Holt-Gimenez of Food First.
Lázaro Peña, a professor at the University of Havana and the director of the Center for Research on the International Economy, adds that, “In Cuba, no one doubts the necessity to develop a sustainable agricultural system. However, sustainable does not necessarily mean organic.”
“The government is really trying to encourage growers to increase their yields,” says Professor Messina. But they are not giving farmers the resources they need to do it, organically or with synthetic inputs.
One way to grow more food is to increase the number of farms and farmers. However, rural Cuban youth don’t want to get their hands dirty. They want access to foreign dollars coming from the tourist industry in cities like Havana and Santiago.
“In communism there is no private property…the Cuban Government says you can use the land and till the land… that has not worked,” remarks Jorge Salazar-Carillo skeptically.
There are two different currencies in Cuba, Convertibles (CUCs) and Moneda Nacional (pesos). CUCs can be traded one to one with the dollar, whereas pesos go for 25 to one. The Cuban people use the pesos, whereas foreigners and Cubans in the tourist industry use CUCs. Farmers want CUCs, not slow-growing tomatoes. In 2014, the government stated that it would work towards a singular currency – but when this will happen is unknown. The government must assess how to progress with a limited agrarian labor force.
“Would Cuba import labor?” speculates Holt-Gimenez. “Maybe but that might cause other problems.”
One way to promote farming, organic or otherwise, is to make it more lucrative. In places like the United States, organic food is trendy, it’s sexy, it’s healthy, it’s eco-friendly and people are willing to pay more for it. In Cuba, it is a slightly different story.
“Cuba is probably the only country in the world where organic produce doesn’t receive a price premium,” explains Bill Messina. There isn’t the same idealism about organic food in Cuba as there is in the U.S. It’s more about survival.
If Cuban farmers could find a way to get higher prices for organic food, it might stimulate the market. Liberalizing domestic distribution networks, which are now government owned, could create some economic opportunities for farmers, suggests professor Gabilondo. Additionally, the tourist industry could potentially provide a market for higher-priced organic produce. However, “I don’t think that the tourist sector is that sophisticated at this point that it is going to represent a significant share of the market,” Messina says.
Another potential outlet for organic produce would be to export food to other countries. However, Cuba’s agricultural exports are primarily focused on sugar, which accounted for 89 percent of the sector’s exports between 2012-2014, not organic fruits and vegetables. Additionally, most of the “fresh fruits and vegetables [eaten on the island] are basically grown there,” says Holt-Gimenez. Cuba lacks economies of scale needed to export produce.
If they were able to ramp up production, the easiest market would be the U.S. However, exporting goods to the States is still complicated. The Obama Administration recently opened up trade options between privately-owned businesses in Cuba and the States. However, products produced by the government or “government owned” businesses can’t be exported to the States, professor Ritter explains. Because the government controls the agricultural sector, even cooperatively-owned farms are technically government entities. So the potential to receive U.S. dollars for organic produce from Cuba is restricted.
“One little producer of string bikinis is exporting products to Miami,” adds Ritter. However, small business exports are extremely limited.
Like everything in Cuba, things take time. The biggest catalyst for change in the agriculture sector (though it may not promote organic growth) will come with financial liberalization, both on the island and from foreign entities. As Eric Holt-Gimenez puts it, “Nothing big is going to happen until Cuba has access to credit,” and if that credit is going to come from the United States, that would mean that the cash purchasing policy in TSRA would have to be lifted. As of this writing, there is no such plan in the works.
“A lot of what is going to happen in Cuba’s agriculture sector depends on who might invest and how they might invest,” suggests Bill Messina. In 2011, Odebrecht, a Brazilian company, invested in Cuba’s sugar industry and the sector has seen about a 60 percent increase in production since then, the only sector with any remarkable growth in recent years, Messina adds. However, as professor Ritter points out, “every other country in the world has had the opportunity to invest in Cuban agriculture and they have not.”
At this time and in the near future, Cuba’s agricultural sector is likely to continue as it has been. “We can only go by statistics and the statistics suggest that there’s not going to be any demonstrative change in the remaining months of President Obama’s presidency,” says John Kavulich. Some growers will remain organic and others will keep utilizing limited chemical inputs. As Cuba opens its doors to business, both internally and to foreign investors, different “chefs” will undoubtedly add ingredients to the Ajiaco that is Cuba’s agricultural industry.